Why a Broker is a Property Manager's Best Friend
Competition
for Class A trophy office space is heating up in many markets, and Tampa,
Florida is no exception. With properties vying to secure leases with
best-in-class top-tier renters, property managers are pushing owners to create
the most attractive buildings possible. However, some owners are more
challenging about spending money, despite their goals to drive rents and
increase occupancy. For these clients, it’s the property manager’s job to make
them realize that in order to make money, you sometimes have to spend money.
How Property Managers and Brokers Benefit From Partnerships
One of the best things I have learned as a property manager
is that when there’s a challenge in getting budget items like upgrades or new
amenities approved, teaming up with a leasing broker can be a good idea. A
leasing broker can help the owner to understand expenses because the broker is
seen as the one who is generating direct revenue. Even when a broker and
property manager work for different companies, they have a mutual goal
of leasing up the building with a good roster of residents.
A
broker and a property manager look at a building differently, and a broker can
help a property manager to understand how the building shows to prospective
renters. Residents talk to each other. If a building has operational issues,
it’s going to get out to the market and potentially hurt the ability to
lease-up the building.
Property
managers should do consistent walk-throughs with their brokers, who can point
out what a property manager might miss like common areas that are dirty, the
minute details such as loose door handles, and amenities that aren’t up to par.
Brokers and property
managers should also consider vacant spaces. Should a
space be left as a shell? Be somewhat built-out and ready for move-in? What are
the needs of the market? At the very least, they should be clean and free from
construction or building materials. Together, they can approach an owner
and make a recommendation that makes the space more attractive.
What Happens When Managers and Brokers Work Together
Brokers
and property managers who don’t work together can cause real problems for the
building owner. For example, a broker might set unrealistic expectations about
the move-in timeline to secure a new resident. A property manager will know how
long it will take for the space to be ready, so they must work together or else
its possible that the start date might get pushed back, leading to an unhappy
renter that’s barely into their lease.
Brokers
can also help property managers brainstorm creative
marketing and retention
initiatives that won’t break the bank for the owner. Conversely, if the budget
for these initiatives is too small, the broker can help persuade the owner to
provide the capital for these items.
For
large office buildings, property managers begin working on budgets over the
summer and brokers should be an integral part of the discussion. It’s important
to know what’s going on in the market and communicate the most up-to-date information.
For example, construction costs can fluctuate, and resident improvement costs
can rise from $30 PSF to $40 PSF on a year-over-year basis, which will impact
your budget.
A
broker will also have insider knowledge on what competing buildings are doing
and investing in to stay top-of-mind. If a property down the street is
investing millions in the renovation of their common areas, a property manager
might want to budget in upgrades that would make their common areas comparable.
While it’s easy for an owner to say no to a broker or a property manager, it’s
harder when they come together as a team.
Each
member of a building’s team from security to the engineers to the property
manager to the leasing broker plays a critical role in the success of how the
building is perceived in the market and how it’s run – all of which drives
value for the owner.
Written by Julie Palmer-Nicholson, Director of Commercial
Property Management at Franklin Street.
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purposes to highlight the commercial real estate market. It solely represents
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the opinion of Pacific Coast Commercial.
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