Great property managers can tell you something about every facet of commercial real estate— from highly technical lease terminology to how a chiller works. Nonetheless, even the best property managers may be fuzzy on the details of what exactly “asset management” entails. If you are a property manager looking to generate value for your building and take your career to the next level, actively engaging in the asset management process is essential.
In the commercial real estate industry, asset management represents everything that happens in the life cycle of a property: acquisition, leasing, operations, staffing and disposition. Understanding the big picture for your property is the first step in engaging your role on the asset management level. It is critical to look beyond your day-to-day responsibilities and think strategically about how your property is positioned in the marketplace. For this more holistic view, you should start by asking a few important questions:
• What are the short-term and long-term goals for the project? Every owner has a different plan for their asset, which could revolve around a company philosophy, a location or simply the return on investment expectations established when the property initially was purchased.
• Is the property a long-term hold or will the owner add value, lease it up and return it to the market quickly? Knowing your owner’s goals for the property is key for you to present capital and operational options. Ask for a copy of the underwriting, if available, so that you know what rental rates, operating expenses and capital expenditures milestones are anticipated. Having a grasp of the underwriting will help you in your multi-year budget plan and support the leasing team with suggestions for preparing vacancies to bring to market.
So, now that you know which direction your property is headed in, how can you help bring value to the asset and address the interests of your ownership? Start with what you already do well: serving as the eyes and ears of the property. As a property manager, you are in the trenches each day making sure the needs of your existing tenants are met, which makes you uniquely positioned to find out
up-to-the-minute information about these tenants outside of normal business channels. For example, you might notice that one tenant is on a hiring spree, while another tenant is canceling a significant number of its employees’ keycards.
This is your moment to share your “insider” information with the ownership. Will the second tenant end up subleasing a portion of their space? What does the lease say about potentially recapturing the space and leasing directly to a new tenant? If that tenant leased the space in a down market, the rent upside could be tremendous.
Many property managers are fortunate to work with asset managers who are tasked with monitoring and implementing the strategic plan for the property to make sure both the short-term and long-term goals of the project are being achieved. Developing a strong working relationship with your asset manager can result in a more successful building. Asset managers focus on keeping occupancy levels high, and property managers can help in this regard by working to keep existing tenants in the building. You might be surprised by how important your cultivated customer relationship can be to a tenant’s decision to renew. Unless a project is being repositioned entirely, the cost to renew an existing tenant is much less than bringing a new one to the project. To help attract new tenants, property managers
can suggest ideas about ways to differentiate the property through cutting-edge amenities, like web-based work order systems, fast Internet connectivity options and building wellness programs. Additionally, keeping the asset manager informed about building projects and offering suggestions about how to keep common areas current can make a real impact on asset value.
It also can be beneficial for you to reach out to the listing brokers and set up a market tour of competitive properties. Asset managers usually rely on the property listing brokers to keep them up-to-date on the local market. Why not contribute to that dialogue? Once you have an awareness of how your property stands apart from its competition, you can work on honing your sales skills. Participate in as many leasing tours as possible. Your knowledge of the property can make you a more natural salesperson, even if that isn’t your typical role. Partner up with your leasing representatives and ask to be included in the Letter of Intent process.
Instead of just responding to the operational questions on the proposal, read it in its entirety and track the deal point changes as they progress. When you next meet with your asset manager, share any relevant data from your tours. Sending your asset manager occasional emails about competitive deals in your area or any notable shifts in the local market also can be helpful, especially for asset managers who work in another market.
Ready to broaden your commercial real estate experience and take the next step in your property management journey—or even branch
out into an asset management position?
Find good mentors both inside and outside of your immediate professional network to increase your exposure to different perspectives.
Serving in a leadership role with your BOMA local association or local business improvement district also can provide you with an
introduction to new colleagues and other local leaders. If you would like to make a transition in your career, don’t underestimate
the skills you already bring to the table. Identify what you need to augment in experience or education and go after it. For example, BOMA International offers education sessions at its annual conference about asset management, as well as a course, “Lease Analysis, Valuation, Negotiation and Approval,” that provides an overview of important financial analysis skills.
Regardless of which path you plan to take, your property and your career will benefit from your increased focus on asset management and asset value.
Shared from BOMA Magazine
BY SARAH MACINTYRE, RPA, AND GAIL RINGER, RPA
