Winning future battles 

As property managers, we are always seeking ways to reclaim time in our days. A rich spectrum of predictable tasks and emergencies is bound to arise. We can’t control when issues coalesce, but we can control aspects of our process that mitigate time loss. Since it’s impossible to slow the rotation of the Earth to make the days physically longer, how can a property manager do something today to gain time tomorrow?

Establish trust with allies early

Client and tenant interactions comprise a majority of a property manager’s workday. While email and office visits may take more time quantitatively, in the long-term they are a more efficient way to build trust with your clients and tenants. Cellphones can be good for quick communication, but nothing beats a face-to-face meeting. As property managers, we want our clients to perceive us as expert advisors, like CPAs or physicians. It starts with trust; the first interaction or problem to solve with each client or tenant is crucial to their peace of mind. This trust is the foundation of the relationship. 

Courtney Davenport

“If your first interaction with your tenant is to collect the rent or to tell them something they don’t want to hear, you are setting your relationship on a very rocky road right from the start,” says Courtney Davenport, vice president and regional director for Lincoln Property Company in Sarasota, Florida. “Try to establish credibility early in their lease and occupancy timeline. Let them see your face so they know you are a real person and a true professional. That way, when you have to deliver bad news, you will show up with reliability and humanity.”

Once you have established trust, how do you nurture it? By providing value-add information that directly supports the client’s strategy or the tenant’s business. For example, if the client is a hospital system, educate the executive administration team on the nuances of commercial real estate. Explaining what motivates developers’ and investors’ strategies for acquisitions and dispositions demonstrates a commitment to executing the hospital’s strategy within the bounds of the market. Sure, patient care is their primary focus and source of revenue; however, clinics outside of the main hospital are subject to the effects of the commercial market. 

You can also make a big difference by proactively completing simple tasks, such as reviewing lease renewals six months before the termination date and ensuring any favorable term renewals don’t expire. 

I once had a client renewing a master lease with a developer/owner. We negotiated a more favorable lease rate and tenant improvement (TI) allowance by extending the term from five to seven years. I explained to my client that the landlord was willing to accommodate this because a longer lease term translates to a better cap rate and, therefore, better asset value, even with the reduced lease rate. 

My client is also a high-credit tenant, so explaining the impact of the cap rate was also of note. Since my client wanted to be in this market long term, the two extra years on the term were palatable if we could improve the interior with TI money. 

This opportunity allowed me to build a solid foundation of trust with my client. From that point forward, the client granted me more autonomy and required fewer updates on the portfolio. Davenport says, “Those in a position of leadership and authority are often expected to have all the answers. Let them think to themselves, ‘Real estate question? I have someone for that.’ Then, be that go-to person.”

Empower your vendors

Being the single point of contact for property operations means the real estate manager is the go-to person whenever there is a question. The relationships you build with vendors, leasing agents, consultants, and other property managers provide opportunities to be efficient. I have cultivated stable working relationships with the majority of my vendors to increase the number of eyes I have on the assets I manage.

I empower my janitorial vendors by allowing them to be my secondary eyes and ears at the medical office buildings (MOBs) I manage—a portfolio of assets that spans a two-county geographical area. It’s not uncommon that I’ll receive a text message with a photo if the nightly cleaning crews notice a wet ceiling tile or office light outage. 

Tab Eiler

Tab Eiler, general manager at Supreme Clean Maintenance Solutions, Inc. in Pensacola, Florida, told me, “As a janitorial service provider, our philosophy is that we’re not just cleaning for our clients, but we’re also cleaning for their customers who come through their doors each day. The visual cleanliness of the environment and even the smell in the air stand out when someone visits a place of business, so we want to be thinking, ‘What would I experience if I were someone coming to this building for the first time?’ By having this mindset and performing regular inspections of the facilities we service, we can mitigate potential client dissatisfaction and reduce and eliminate the need for rework.”

Another MOB I manage is 200 miles away in Tallahassee. I typically visit five or six times per year. Thus, it’s good that my pressure washing vendor alerted me to an area of the roof where he noticed water pooling. What could have been a costly and time-consuming major fix was a minor repair in two visits with my roofer. In addition, if it were a significant fix, that would have triggered more meetings and likely a special trip to Tallahassee for the VP of construction and me. That is a battle I am glad did not occur.

As much as we would like to be omnipresent, we understand that putting eyes on the assets is a continuous process. However, we can extend our reach by leaning on other industry professionals.

Take inventory of your equipment

Repairs and management are the dreaded budget-buster. Not only do most property managers have to diagnose, fix, and follow up on repairs, but they also have to report on variances in the budget, and those are never enjoyable conversations. Emailing a client on a Friday to approve a $20,000 proposal for a 7.5-ton HVAC unit does not qualify as a “fun” interaction. But it does happen. Having a good handle on the age and condition of the building systems will allow you to plan contingencies in the budget and provide foresight to utilize capital money for replacements. 

Once you have an inventory of the equipment, if your client is responsible for these items, ask if capital funding money is available or can become available in the next few years to replace HVAC units that are 12+ years old. Especially if net operating income (NOI) is the client’s primary focus, keeping the maintenance visits to a minimum will directly increase the asset’s value. Most real estate investment trusts (REITs) live and die by NOI. In my experience with hospital systems, NOI is not as big a factor as it is for REITs. However, if the CEO or COO gets a call from an unhappy physician who has patients complaining about the temperature in the exam room, fixing this issue will move to the front of your list and be time-consuming. 

Share your experiences

Never miss an opportunity to share an experience or ask a peer about one they just went through. Real estate and property management are perpetual practices. Every 20+ year veteran real estate manager I have interacted with admits they still encounter new challenges. Collaborate with your fellow managers on specific situations you have experienced and note their outcomes. Sometimes, the negative outcomes teach more than the positive ones. 

Kristi Principato

Kristi Principato, director of property management at Holladay Properties in Tampa, Florida, told me that “having a foundation built on trust with your tenants, clients, and vendors is vital to success. No two days are the same in a property manager’s world, and events that may not have a ‘quick fix’ often occur. In these moments, our tenants and clients must trust that we are rectifying the situation as quickly as possible and in the best interest of all involved. Then, we must lean on our vendors and trust them to correct the issue. If trust is broken in either of these circumstances, it affects everyone and jeopardizes future business matters.”

Do not resist interacting because a situation or issue seems different than one you may need help with. Although no two situations are the same, there may be a key piece to the story that another property manager can use or provide feedback on. The problem-solving process has many uses. The experiences can also provide technical knowledge to newer property managers who may not know why a tenant would require three-phase power. This doesn’t have to be limited to just commercial or residential either. Finally, some of the best tenant/resident relationship strategies I have received came from a multifamily property manager. 

As Ryan Gould, CPM®, senior property manager, Cornerstone, says, “If tenants and clients trust a property manager to be their problem-solver, it allows for a collaborative rather than combative environment. Clients are more likely to allow managers to make decisions on how best to maintain properties, saving time on discussion before executing a decision. Tenants are more likely to be a second set of eyes for issues at the properties rather than demanding that issues be addressed with haste.”

Property management should be a cooperative enterprise that spans decades. The more we preserve the body of knowledge, the more likely we are to tip the scales of time back in our favor.