Well-honed procedures determine the difference between mediocre commercial property management and great commercial property management. And the natural outcome of excellent commercial real estate management is a successfully performing asset with solid returns. The right processes can help mitigate unexpected maintenance or budget cuts.

Well-crafted operations go beyond just following a series of steps – they create consistency and a go-to guide in cases of emergencies.  While inferior processes make for extra work hours, additional expense and confusion.

The fundamental responsibilities of a commercial property management firm are to establish innovative, practical, and cost-effective solutions to property issues.  The goal is to increase ownership’s return on investment, which can only be achieved with the best possible results in accordance with an owner’s business plan and goals.  Relevant solutions call for proven procedures.

Tim Meissner, a Principal at Meissner Jacquét Commercial Real Estate Services, a San Diego-based commercial property management company, says that “effective management is a by-product of effective processes.  We have instituted detailed procedures to ensure complete oversight – our management and accounting teams have checks and balances to achieve superior results.”

Commercial property managers have the considerable responsibility of providing, maintaining and developing a wide spectrum of services. These services range from enacting ownership’s business plan and investment objectives, site management and preventative maintenance, client relations, tenant retention and satisfaction,  accounting and reporting, and vendor management.

Comprehensive, successful commercial property management processes should aspire to outperform the client’s expectations.

Unquestionably, effectively combining processes with the appropriate resources is vital to the success of any business’s health. Effects can be felt at the executive level by achieving strategic and operational objectives. On a mid-management level, proven systems can create a safe and effective working environment – a must have for the well-being and performance of any business, no matter what the size or function.

Resource management is key to running the operations of any commercial property. An effective property management team not only identifies what needs to be done to maintain a property at optimal level, but it also performs extensive due diligence to ensure appropriate resources are in place so that the property operates at peak performance.

Designing and implementing a commercial real estate management process that is unique to the property requires a structured framework that will allow the management of the process to become second nature to those responsible for carrying it out.  Vendors including security, HVAC, janitorial, and landscaping, all require a detailed maintenance schedule to ensure that services are performed consistently and correctly.

Professional commercial property management firms institute proven processes, techniques and practices, including the methods, systems and resources to manage:

• Construction projects
• Property operations
• Vendor management
• Maintenance  & technology systems

A crucial component of a successful commercial property manager’s process is to keep the owner informed at every level, including:

• Conducting regular site inspections
• Providing detailed property reports
• Supplying accurate and timely financial accounting & reporting
• Delivering maintenance recommendations
• Providing communication regarding tenant retention and satisfaction

Realization of long-term goals are achieved by staying current in industry best practices and trends, maintaining the proper credentials, attending leading industry conferences, and staying abreast of:

• Regulatory issues
• Current technology & equipment
• Energy management & sustainability issues

The sum and substance of the processes a commercial property management team enacts separates performing properties from non-performers, and can have a direct impact on a property’s bottom line. By adhering to proven procedures, instilling firm checks and balances, and constantly testing and measuring, you can set up your commercial property for success.

Sources:
National Property Management Association
IREM
Meissner Jacquét Commercial Real Estate Services

Your commercial building is affected by uncontrollable elements – both internal and external. Each year it’s affected by backlash from shifts in weather, energy waxes and wanes, construction projects, repair needs, tenant fluctuations, and new regulations. Even some of the toughest structures are susceptible. Being more aware of changes in these areas that are predicted to take place in 2015 can help you, help your commercial space prepare and withstand.

Weather

By now we all know that climate change is real, it’s  across the globe and it’s very obvious in California, the nation’s most populous state. California routinely deals with wildfires, landslides, mudslides, drought, flooding, El Nino, Santa Ana winds,  winter storms, severe freezes and tsunami waves. Over 80 major disasters have been recorded in California  since 1953. Even Southern California’s sunny San Diego has undergone weather-related problems. Ten-year climate projections for San Diego include warmer temperatures, more drought years, more storms and extreme weather conditions, and higher ocean levels.

What will this mean for your commercial real estate? There is uncertainty as to how the changing climate conditions may ultimately undermine the meteorological data we use to design buildings and infrastructure, but the below issues are likely to be seen.

• Increasing health and safety risks for tenants caused by a reduction in the quality of the indoor environment.
• Premature or accelerated deterioration of the building as a whole.
• Potential reduction of effectiveness in safety measures set in place.
• Reduced service life and functionality of components and systems.
• Increased risk for catastrophic failure of systems.
• A rise in repair, maintenance, reserve fund contingencies, and energy costs.
• Escalated service disruptions and emergencies.
• A spike in insurance liability as a result of premature aging or deterioration.

Your  commercial structure is very likely built to code, and that’s great, but it’s important to not rest on that fact alone.  Rain, wind pressure and flung debris are all real threats to your building. While you cannot control the weather, you can mitigate the effects that the general climate and weather swings have on your space by making sure you and your commercial property management team keep apprised of systems maintenance, energy usage, air quality, building construction weaknesses, fire hazards, and the surrounding grounds cleanup. By instituting safety drills and policies, and preventative maintenance on a regular schedule, you may be able to avoid bigger catastrophes.

Construction

Data shows that it is very likely that your asset will undergo at least three property improvement projects each year. Whether they are large capital improvements or smaller tenant improvements, they all affect the general stability of your commercial real estate. By making sure each project is properly managed, you will ensure that your building can take a punch and stay upright. This is an area that an experienced commercial property management firm understands and excels at. Before you start project planning, call your commercial property management team. They can add value through their knowledge of building products, building costs and techniques, their knowledge of general contractors and subcontractors, their negotiating expertise which allows them to verify products and quality, and their organizational skills that allow them to monitor and ensure completion of each phase of construction. Additionally, they will conduct a closeout assessment at project completion that includes a final punch-list and a portfolio of pertinent documents including any needed warranties and instructional materials.

Besides capital improvements, building renovations, and build-out of interior improvements, there is another type of construction that can affect your commercial asset – road and other city-related construction. This can impact your tenants’ commute and ease of access.

Below are two San Diego-specific websites to help monitor these risks and to keep your tenants informed:

• Scheduled Road Closures and Traffic Controls – This is managed by The Department of Public Works.
• Keep San Diego Moving – This site keeps you updated on highway projects, transit and rail projects,regional bike projects, and environmental programs.

Energy Issues

Staying informed of changes in energy costs and mandates can be a full-time task. But no matter how troublesome, being aware of all regulations and available incentives can pay off quickly.

There are organizations that supply commercial property owners with tips and step-by-step methods to practice wise and cost-effective energy consumption.

San Diego has a very active chapter of the U.S. Green Building Council (USGBC), who promote sustainable design and represent over 100 organizations active in “green” building design throughout the  region. The USGBC’s website states, “there are more than 60 LEED Accredited Professionals in San Diego. LEED stands for Leadership in Energy and Environmental Design. LEED’s Green Building Rating System® is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings.”

Commercial real estate owners can also embrace more energy-efficient technologies. According to The Harvard Business Review, property owners can “measure the sources and levels of their own greenhouse gas emissions; identify potential impacts of new regulations or products, droughts, and storms, etc.”

According to EnergyStar, a U.S. Environmental Protection Agency (EPA) voluntary program that helps businesses and individuals save money and protect our climate through superior energy efficiency, commercial buildings in the United States consume 21% of the nation’s energy at a cost of more than $100 billion per year. These buildings also generate 17% of our country’s greenhouse gas emissions, which ultimately becomes a climate change factor. However, EnergyStar also notes that, by 2035, 75% of all buildings will be new or renovated, opening up a great opportunity for builders to install green systems as they construct. A recent study of architects, engineers, contractors, owners, and consultants also shows that 53% of U.S. firms expect to be dedicated to green building by the end of 2015.

According to a Deloitte report, the right focus on energy and technology has an affect on tenant retention as both elements may impact space supply and demand in and after 2015. “Tenants, more so than ever, are really incorporating technology demands and sustainability considerations in their leasing decisions.  Properties that can’t support the technology needs of their tenants, or aren’t sensitive to their sustainability goals, won’t perform as well,” states a Deloitte official.  This can apply to the performance of commercial space as well.

New Laws

There are new regulations on the horizon for 2015 that commercial property owners need to watch out for. Visit your city’s website to find out what these new regulations, codes,and requirements are, and how they might affect your asset.

Your commercial building is an asset with a personality all its own. By hiring a professional, third-party, commercial property management company, you will be able to keep an eye on it from all angles.  Tim Meissner, a Principal with Meissner Jacquet Commercial Real Estate Services, who has been in commercial real estate for 35 years, says  “an experienced commercial property management team can help property owners prepare for and control  many seemingly uncontrollable issues that can threaten the longevity of commercial assets.”  So instead of waiting for the next repair, improvement, or regulation, take action today by understanding your options.

Sources:

EnergyStar

California Association of Realtors

San Diego County – Department of Public Works

Keep San Diego Moving

REIT.com

City of San Diego Development Services Department

Meissner Jacquet Commercial Real Estate Services