Mastering the balancing acts of property management.

Today's tenants are savvy. They understand that they must provide a well-maintained business environment to project a positive image for their customers while providing an excellent place to work for their employees. All of this has to come at affordable rates, as well.

Landlords face the same challenges their tenants face--and another important factor: rising costs.

Property managers and owners must cope with rising energy and construction material prices on one hand, and requests for more amenities from their tenants on the other. The property manager's challenge is to keep operating expenses down while offering affordable rents and attractive amenities.

Longer-term commercial tenants who are comfortable in their office space usually look to lock into lower rents, more so now than two years ago. This is an exceptional challenge because of rising costs. But, entrepreneurial firms, like Heritage Management Company, are able to focus on offering more value for the dollar. We consistently review our costs instead of simply paying expected expenses. This strategy allows us to work more closely with the individual client to work together to keep expenses down and minimize passthrough expenses to the tenant.

In addition to rising utility and construction costs, the increase in property taxes continues to be an issue, and the new Governor of New Jersey has promised to address this problem.

Fortunately, New Jersey is pro-business. In urban areas, the state has instituted Urban Enterprise Zones (UEZ) with a full complement of benefits that companies can enjoy when they choose to locate within a UEZ. Landlords can offer these benefits as amenities without incurring direct costs. There are tax incentives, lower-cost housing for workers, and increased availability to mass transportation. In Newark, for example, all major rail lines from New Jersey go through Newark's two major rail stations: Newark Penn and Broad Street. With the completion of the Light Rail system, tenants and their workers will have 15minute access to Manhattan and easy travel to other important cities. Additionally, the region's major roadways--The New Jersey Turnpike, The Garden State Parkway, and Interstates 78 and 280, border Newark. Managing properties in these zones makes it possible to offer tenants more amenities that occur naturally, without expense to the tenant, manager and building owner.

Another value that landlords can offer their tenants is cost-effective technology. We've recently renovated two buildings in Newark--550 and 570 Broad Street--where we have installed computerized systems that control heating and cooling. Our chief engineer can monitor the system off-site and make any necessary adjustments.

We do not expect to substitute people for computers, but this type of arrangement gives us more flexibility and quicker response time while closely monitoring system efficiencies.

Other new technology allows property managers to install security cameras with increased recording time. And looking toward the future, the newest technology will enable us to get away from key cards and change over to biometric systems, utilizing fingerprints and eye read to identify individuals who can safely enter buildings.

One of the most important amenities landlords can offer their tenants is on-site accessibility. Being there counts. When there is a problem, on-site managers are there, not only to respond to emergency situations, but also to monitor long-term maintenance that often prevents costly, radical repairs.

Good landlords of commercial buildings today understand the issues of rising energy prices, increasing property taxes, and keeping rents affordable. It is the landlord's responsibility to stay current with tenant needs and concerns, to modify their buildings with available enhancements that work for both the landlord and tenant. And ultimately, the relationship between landlord and tenant provides cooperative working relationships that result in satisfied tenants that stay committed to their space for the long-term.

Steven Greenberg, Principal, Heritage Management Company