STRATEGIES TO KEEP OWNERS & TENANTS AFLOAT

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STRATEGIES TO KEEP OWNERS & TENANTS AFLOAT Powered By Docstoc
					StrategieS
tO keep OwnerS &
  tenantS aflOat
   Focusing on Property Management
   Fundamentals is Essential in an
   Uncertain Economy by brad ashley, CPM®




          www.irem.org   32 may.jun 2009
                                                                esTablIsh PrOFessIONal relaTIONshIPs
                                                                Strong relationships in business are essential. We often
                                                                hear it is who you know, not what you know, that allows
Our clientS are nervOuS abOut the                               managers to keep up with their busy lives and meet
market and ecOnOmy. real eState man-                            numerous deadlines on time. Active participation in net-
agerS in citieS acrOSS the natiOn, frOm                         working groups like IREM or CCIM, or through online
the largeSt Office buildingS in new                             Web sites like Facebook, are critical to growing relation-
yOrk city tO the SmalleSt Of retail                             ships between managers and their daily contacts.
SpaceS in kanSaS, are feeling the preS-
Sure tO maximize aSSet perfOrmance.                             With Owners
The unfortunate increase in sub-prime loan foreclosures         Regular communication with your asset manager or owner
has been magnified by the media with hourly reports.            during these times is very important. A real estate manag-
The downturn of the residential market has transferred          er’s goal should be to provide solutions. Owners should be
to the commercial market, making owners and investors           presented with the best answer to an issue and be given a
cautious to sell, fearful they will not secure a satisfactory   chance to modify it, but rarely should they be asked ques-
sale price.                                                     tions without an answer already in place. It is important to
   During the summer of 2008, buyers and sellers contin-        analyze a problem and to try and think two steps ahead.
ued to make deals, but the prices paid for properties were         Like us, owners hear the media tossing about the word
not nearly as strong as we had seen just three years ago.       “recession” on a daily basis. They are concerned about the
Highly-leveraged debt buyers have, for the most part, been      condition and performance of their properties. In addition
pushed out of the market. Banks and other institutions are      to regular monthly reports, it is also advisable to commu-
watching their lending closely. During the fourth quarter       nicate with owners of industrial properties at least twice
of 2008, deal flow all but stopped as everyone watched and      a month and owners of office buildings on a weekly basis.
waited for reaction to the latest government bailout.           Multifamily ownerships typically prefer regular contact
   So, the question now is, how can real estate managers        several times a week from the local managers to keep
keep their business viable during this economic crisis?         informed of the operations on the property.
   One good strategy would be to get back to basics. It is         Communication with owners is always determined
critical for property management professionals across the       on a case-by-case basis. Some owners may wish to
United States to focus on management fundamentals—              speak with managers daily on high-needs prop-
tenant relations, proactive communication, capital proj-        e
				
DOCUMENT INFO
Description: Real estate managers in cities across the nation, from the largest office buildings in New York City to the smallest of retail spaces in Kansas, are feeling the pressure to maximize asset performance. Regular communication with your asset manager or owner during these times is very important. A real estate manager's goal should be to provide solutions. It is important to establish good working relationships with brokers to promptly pursue new tenant deals. Brokers are typically self-reliant by nature and have been known to keep details of prospects to themselves as they fear someone else might take their deal. Your relationship to your tenants is also very important, especially during hard times. Retaining a tenant is far less expensive than finding a new one. Make sure you carefully monitor properties with base years and expense caps. When analyzing projects, it is important to determine if the project can be completed in phases or modified to provide a savings to the owner.
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