Commercial Property Management FAQ
When interviewing commercial property management companies there are two types of property owners. Ones that are educated on how to hire the best management company for their property and ones that wind up stuck with a commercial broker that doesn’t the bare minimum but wants to be paid full commissions.
Commercial Lease Locators is committed to guiding you through the leasing and management side of the business. We handle every aspect of the management process and provide a single point of contact.
During the leasing process, CLL is focused on marketing the property through multiple channels to help reduce vacancy rates. Unlike other commercial real estate brokers that only put a sign in front of the building.
Don’t’ make the mistake of working with a broker that is not willing to go above and beyond when it comes to leasing and management.
Frequently Asked Questions
What is a typical commercial property management fee?
Commercial property management companies charge between 2-6% of the gross monthly revenue and some of the larger brokerages that handle commercial property management can charge fees based on square footage ($0.18-$0.55). If your property is C class or lower and requires a more active property manager then expect them to charge a flat rate.
What questions to ask when interviewing a commercial property management company?
- Which sectors do you focus on?
- How long have you been in commercial real estate?
- Do you handle the underwriting and screening of the tenant?
- Can you provide details on the monthly activities that you’ll be performing?
- What does your fee schedule look like?
- Do you handle the leasing of the property?
- What type of marketing do you do and who pays for it?
Commercial property management, what credentials are needed to do that line of work?
It varies by state but in the state of Texas, commercial property managers are regulated by TREC (Texas Real Estate Commission). The property manager will need to be licensed by the state and uphold all rules and regulations that apply to property management.
How to audit a commercial property manager?
The first thing you need to do, determine what you want to audit and why. If you’re having issues with vacancy then your audit should consist of activity reports and detailed explanations on marketing. If you believe the property manager is overcharging for service requests then you’ll need them to provide a schedule of activities and cross-reference what they’ve done/billed for and what you received. Pro tip – look for general descriptions on maintenance and ask them for specifics. If they can’t provide details then they’re probably overcharging.
How to hold a commercial property manager accountable?
Everything needs to be measurable. If you can’t quantify it or measure it then it will be left open for interpretation and that is where you’ll run into trouble. If the property manager can not provide detailed activities with detailed pricing then that is a red flag.
How to determine a good commercial property manager from a bad one?
It’s in the details and how they engage with you from the beginning. If the property management company can not provide specific activities on how the lease and manage the property then I’d recommend interviewing other companies. For example, if the broker starts the conversation with “I’ve been doing this for 20 years and we’re committed to excellence”, I’d interview other companies.
Do commercial property managers specialize in property types?
Yes, but it depends. If you’re in a major metro like Austin, Dallas, or Houston then brokers will specialize in property types. If you’re in a smaller metro area then they typically don’t specialize but it never hurts to ask.
How long should the commercial property management contracts last?
Most commercial property management contracts last for 12 months (1 year) and if they’ve exceeded your expectations then renewing the contract is very easy and straightforward. I’d recommend that you have some type of termination clause in the agreement just in case they don’t live up to their promises. Pro tip – make sure you read the management agreement. Old school brokers have a tendency to checkboxes that mandate that a commission is paid when no real work is done.
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Stop wasting time with outdated property management companies that do the bare minimum.
New or existing property owners looking to hire a property manager fail to understand the importance of a commercial broker that knows how to out-market the competition.
Why do property owners get stuck with lazy brokers? They lack the knowledge during the interview process to determine which broker will drive the best results. They rely on general commercial real estate lingo instead of asking for deliberate, repeatable tasks that can be measured.
You should hire a landlord rep/property manager that is an extension of your personal staff.
Stop losing money with vacancies that can be easily filled with a strong marketing plan and hire a commercial broker that can deliver results.