I am not one of the most active tweeters out there but I have made a conscience effort to shoot out at least one post a day with a little nugget of wisdom for shopping center investors. My last two posts concerned the importance of good shopping center management and a good leasing agent. I thought I would just expand on why these are critical for your shopping center investment. I plan on covering the importance of good shopping center management this week, and the leasing agent next week.
Shopping center management is sometimes kept in house or sometimes contracted out to a third party. Regardless of whether it is your company or another company managing your shopping center investment, it is important that this aspect of shopping center ownership is not overlooked. Property management is a lot like a umpire or referee, you don't really notice them until they are really bad. Property managers should be an extension of your investment company. They should understand the goals that you have for your shopping center and be able to provide a detailed plan to help reach those goals.
Property managers should be able to provide detailed accounting information in a timely fashion, handle any maintenance concerns promptly, and make sure that the property is aesthetically pleasing. Whether your shopping center management is handled in house or by a third party it is truly a reflection on you and your company.
How does management protect your investment?
If a property manager is performing their job correctly, your property will be ready to put on the market at any time. You will have all maintenance records, leases, renewals, expenses, service contracts, and cam reconciliations available for due diligence. The property will look healthy and properly landscaped.
A good property manager will also have a good feel for how happy the tenants are. This is important when it is time for lease renewals or finding possible solutions for an unhappy tenant. Unfortunately property managers also have to chase after lease payments.
Property management is extremely important to shopping center investments, when done correctly they add a tremendous amount of value, when done incorrectly the property can lose a tremendous amount of value.
I am not a property manager. I specialize in the acquisitions and dispositions of shopping centers, but when performing my analysis on a center for disposition or acquisition I can tell how well a property has been managed. It can make my job really easy or extremely hard. I see the effects of good and bad property management.
Some things to keep on mind when looking for a property manager, or management firm.
Do they have experience with shopping center management?
Do they participate or are they members in local or national property management organizations?
Do they continue their education?
Do they own shopping centers themselves, this can be a conflict of interest.
What property management software do they use?
Do they have the capacity to handle the size of your shopping center?
Again, I am not a property manager, but as a professional that specializes in shopping center investments I see how valuable a good property management firm can be. They are definitely worth the percentage of annual income they are paid.
