Commercial property management companies can significantly ease the burden of commercial associations by assuming the day-to-day administrative tasks. These companies can ensure operations run smoothly and finances remain in good health.
What do Commercial Property Management Companies Do?
Commercial properties require extensive maintenance, oversight, and management. Typically, a commercial property association is responsible for these tasks, handling common areas, tenants, and other services. It is not uncommon for commercial associations to fall short, especially when their members are inexperienced or time-crunched.
Enter commercial property management companies.
What is Commercial Real Estate Property Management?
Commercial property management covers a wide range of duties and activities. It is essentially property management for commercial properties, which involves oversight and operational direction.
Managers are responsible for a variety of tasks, including but not limited to:
- Listing commercial properties online
- Screening tenants
- Negotiating lease agreements
- Setting and collecting rent
- Managing tenants
- Maintaining common areas and facilities
- Complying with relevant laws and ordinances
Residential vs Commercial Property Management
While residential and commercial property management share some similarities, they are not the same. The most apparent distinctions include:
- Clients. The most obvious difference between commercial and residential property management is the client base. Commercial property management companies serve a variety of commercial properties, including office buildings, warehouses, and retail buildings. On the other hand, residential property management companies serve residential properties. These clients have differing needs, and managers deal with different sets of people.
- Area. Commercial properties often have larger areas of coverage, requiring more extensive oversight. In comparison, residential properties are not as wide-reaching or broad.
- Leases. Residential leases tend to be simpler and more straightforward. In contrast, commercial leases are usually more complex, requiring the oversight of a legal professional.
- Site Management. Commercial managers typically need to stay on-site to oversee operations and address problems as they arise. Meanwhile, residential managers only have to visit every once in a while.
Types of Commercial Properties to Manage
Commercial property management companies cover a variety of property types, including retail, offices, entertainment, and warehouses. Let’s break these down below.
Retail
Managing retail properties typically involves overseeing spaces such as shopping centers, strip malls, and standalone stores. In this role, property managers focus on:
- Attracting and retaining tenants
- Keeping the property appealing to shoppers
- Coordinating marketing efforts to boost foot traffic
- Managing shared areas
- Ensuring a welcoming environment for customers
Offices
Office property management covers multi-tenant office buildings and business parks. These managers handle a plethora of tasks, including:
- Leasing
- Ensuring day-to-day maintenance
- Managing tenant relationships
- Space planning
- Coordinating tenant improvements
- Keeping shared areas in top condition
- Enforcing security measures and access control systems
Entertainment
Entertainment properties include resorts, hotels, amusement parks, stadiums, and other leisure-focused venues. Here, property managers handle the following:
- Coordinating daily services
- Planning events
- Ensuring recreational facilities stay clean, safe, and functional
- Managing bookings
- Monitoring guest satisfaction
- Maintaining visual appeal
Warehouses
Warehouse property management focuses on industrial spaces used for storage, logistics, and distribution. These properties often require large-scale maintenance. Manager responsibilities include:
- Overseeing long-term leases
- Coordinating structural upkeep
- Ensuring compliance with safety and zoning standards
- Facilitating upgrades or space customization
- Ensuring security and accessibility
- Supporting loading dock traffic and freight logistics
Responsibilities of Commercial Property Management Companies
The exact duties of commercial property management companies will depend on the management contract. That said, typical responsibilities include tenant screening and retention, marketing and listing, rent setting and collection, lease negotiation and enforcement, maintenance and repairs, financial management, documentation, and legal compliance.
Let’s break these down below.
Tenant Screening and Retention
Bad tenants can negatively impact a commercial property’s reputation and bottom line, which is why screening is crucial. The property manager can handle background checks, reference checks, and other due diligence activities.
Additionally, the manager listens to tenant concerns and is responsible for ensuring tenant satisfaction. This will ensure a low turnover rate and fewer vacancies in the future.
Marketing and Listing
Commercial property management companies usually handle the marketing aspect, too. They list properties online and answer queries from prospective tenants. This ensures properties quickly find tenants, lowering vacancy rates.
Rent Setting and Collection
Another duty of the property manager is to set and collect rent. Rent should be affordable enough to attract tenants and remain competitive but high enough to ensure a profit. The manager also collects rent from tenants, offering them an easy way to pay their fees on time and in full.
Lease Negotiation and Enforcement
Lease negotiation, renewals, and enforcement can be a tough job for landlords. Commercial property managers can also take over this part of the process, ensuring all bases are covered.
Maintenance and Repairs
Property managers can respond to maintenance requests and work orders. They are also responsible for hiring contractors and ensuring they stay on schedule. Presentation plays a crucial role in the success of any commercial property, and routine maintenance and repairs enhance appearance.
Financial Management
Accounting and financial management are also typically within the scope of commercial property management companies. Managers can track all revenue and expenses, set budgets, and prepare financial reports for property owners’ review. They can also stay on top of all tax requirements.
Documentation
The property manager is responsible for maintaining accurate records and documentation. This includes recording all detailed processes, outlining daily operations, and documenting emergency procedures. Proper documentation helps ensure everything stays on the same page and everyone follows the same processes.
Legal Compliance
Property management companies can help ensure commercial properties comply with relevant laws and ordinances. They can also assist these properties when it comes to filing legal documents and reports.
How Much Are Commercial Property Management Fees?
Commercial property management fees can vary depending on several factors. These include property location, property size, property condition, and the scope of management services.
On average, fees typically range from 4% to 12% of the monthly rental income. Some companies charge a flat fee or a fee per unit to cover all services.
How to Select a Commercial Property Management Firm
Choosing a property manager can be a challenge, especially for fledgling commercial associations. That said, there are some qualities that associations should look for when hiring a commercial property management company. These include:
- Online Presence. Companies with a professional website tend to be more trustworthy due to their reputation and credibility. A website also makes it easier to learn about a company’s services.
- Local Market Knowledge. Commercial real estate markets shift all the time, especially across different areas. A good company should have a deep understanding of the local market.
- Reviews and References. Associations should request references from current or past clients.
- Expertise. A good property management company should be well-versed in handling similar properties.
- Digital Tools. Companies that offer online portals for tenants, financial reports, and maintenance requests are a good bet.
- Emergency Response. Associations should ask how the company handles emergencies.
- Industry Associations. Look for companies that are members of industry associations, such as the Building Owners and Managers Association (BOMA), the Central Texas Commercial Association of Realtors (CTCAR), and the Institute of Real Estate Management (IREM).
A Partner in Commercial Property Management
Commercial property management companies play a crucial role in the success of commercial properties and their effective operations. Before hiring one, it is imperative to understand what they do and what qualities to look for.
Preferred Association Management Company offers exceptional commercial property management services to communities in Central Texas. Call us today at 512-918-8100 or contact us online to learn more!
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