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Quality building management key to success.

It is no exaggeration to state that in today's economic climate building management is often the key that makes the difference between a successful building and a disaster.

In the go-go years of die 1980's, lax or indifferent management was forgiven by the market which continued to add value to both leases and property.

Today, the world has changed again. In order to generate good results from a property, a manager with expertise in many areas is in absolute must.

A good property manager should feel as if there is a "partnership" between the landlord-client and the management company. If one fails, so will the other and it is only by focusing on the property from the landlord's perspective that the full potential of each building can be realized.

There are obviously two legs that hold up the building's success. On the one hand it is important to increase income and on the other one has to reduce expenses. None of these areas can be neglected without harmful consequences.

Some of the areas that a manager must successfully address are: A) INCREASE INCOME

Leasing: Although it is not unusual that the leasing agent and the managing agent be different, a bunding clearly benefits by having a good managing company which also has a strong leasing agent. The prospective leases, as well as all the leasing marketing efforts will then be looked at from a landlord's long-term perspective and not only based on the commissions that can be generated. Vacant space is a valuable commodity to the landlord and a good manager fully understands this and will do what it takes to capitalize on that commodity. The traditional ways are no longer enough; with vacancy rates as high as they are now one must envision new aggressive ideas with quality and creativity in order to attract and retain valuable tenants.

Collections: This is an area that has increasingly gained in importance over the last years as real estate - along with so many other businesses - has suffered from late and decreased collections. Threats of eviction, which was the best tool towards speedy collection in the past, is no longer enough. A good manager will try to get to the bottom of each individual problem and treat it accordingly - just as the landlord would do.

Tenant Relations/Satisfaction: It is not enough lo get tenants to sign a lease; they must continue to be satisfied in the building. A satisfied tenant not only will renew in the building but will also provide the property with the best and most effective advertising that exists: Word of mouth! B) Reduce Expenses

Capital Improvements/Repairs:capital improvements and repairs are often necessary but this is another area where the manager plays a tremendous role. The easy and convenient way for the manager to address problems is not necessarily the best or most effective for the building. A manager that truly has the interests of the Owner at heart will find the solution that is best suited, rather than spend money that is often inappropriate.

Violations: The City Authorities have increased their inspectors and inspections and they often very liberally write up violations on the buildings. The result can be substantial fines if any aspect of the building is neglected even temporarily. A good building manager not only knows how to prevent most violations but also knows how best to expedite their resolution, both by correcting the conditions and by properly and advantageously presenting his case at the hearing. The resulting savings in fines and penalties can be substantial.

Tax Certiorari: This is another area whose importance has increased significantly with the current economic climate. Real Estate Taxes represent a huge portion of a property's expenses and many a building has gone under because of them. Current assessments are often way out of line with the buildings' realistic values and the building manager must work closely and expertly with the attorney who is involved in finding reasonable tax assessment.

Financing: Servicing a mortgage loan or securing new financing have become more difficult than ever since the banking industry has problems of its own. There is no doubt that current value of properties is difficult to pin down and financial institutions have looking more and more at the building operations.
COPYRIGHT 1992 Hagedorn Publication
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Georgitseas, George N.
Publication:Real Estate Weekly
Date:Oct 28, 1992
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