No one ever said being a commercial property manager was a walk in the park.
It’s a job that comes with a slew of challenges, and specialized duties that range from the mundane to the complex. Every day brings unique issues that require equally unique solutions, and it’s a property manager’s job to stay on top of those solutions and maintain a firm grasp on the technology, information, data and other specifics they oversee.
Here are the top challenges faced by commercial property managers in today’s CRE landscape.
Commercial property managers must navigate a sea of information every day. From tenant records and maintenance requests/costs to local laws, lease agreements, legal information and networking data, there’s a tremendous amount of material that must be maintained and kept in check.
Managing this information is crucial to operating a successful CRE venture. How you stay organized will directly affect how you’re able to respond to your tenants’ issues, react to changes in the market, and stay informed on local regulations and property values. The better your organizational skills, the more likely you’ll remain up to speed on all the information that crosses your desk.
Old vs New Properties
More often than not, it’s the newer, flashier thing that commands the most attention. Commercial real estate is no exception. One of the biggest challenges faced by property managers is the arrival of newer properties that make the older properties they manage look quaint by comparison.
While there will always be a market for older properties, that market will consistently be smaller than the demand for more up-to-date CRE. Competing with the new kids on the block might involve updating your property to make it more appealing, or even relocating to a new property to ensure your relevance.
Staying Up to Date on Legislation
As previously mentioned, one issue faced by commercial property managers is the ever-evolving landscape of legalities and legislation regarding CRE. Managers not only need to keep up with any changes and mandates, but also have an acute understanding of those changes and why they’re being implemented.
The need for understanding legislation has led many commercial property managers to seek the help of specialists. Not only does this alleviate some of the burden of staying knowledgeable on the topic, but it also frees up time that can be spent on other aspects of the job. A little help can go a long way.
Technology has a habit of evolving faster than most of us can keep up with. With new advancements come new expectations for workloads and the speed at which the job is done. For commercial property managers, new technology can make keeping track of tenant, property and legal data easier, but constantly implementing that technology – and navigating the demands that come along with it – isn’t always easy.
Many managers are now relying on automated software to handle their data storage and client communications, which in turn also reduces stress and increases efficiency. Keeping up with technology might be a challenge, but if that technology brings new and improved solutions to the table, it might be worth the change.
Client Expectations and Needs
In the end, a commercial property manager’s job is to serve their clients. This means keeping up with tenant requests, answering questions, providing help when needed, staying on top of issues, and making sure the expectations and needs of every tenant are being met.
In a world where tenants expect immediate responses and quick solutions, managing expectations based on what you can realistically do is a big challenge. This is where you may need to lean on your team and, if possible, technology. By using tenant communication software that speeds up response times, you can address concerns faster and assure your tenants that you’re watching out for them.
Will Interest Rates Continue to be a Challenge?
One persistent challenge faced by commercial real estate managers in the current market is the issue of high interest rates. These increased costs have made borrowing considerably more difficult, and have heightened refinancing rates to often prohibitively high numbers.
However, there’s hope for some relief on the horizon. As rent growth continues to increase and property prices begin to fall below pre-pandemic levels, interest rates will slowly begin to stabilize as the CRE market resets itself. This will, of course, provide some welcome relief for property managers as they budget for 2024 and beyond.
Managing commercial real estate might be laden with challenges, but when faced with the right solutions, those challenges can be faced with confidence. Here are a few important takeaways:
- If your old property isn’t getting the same attention a new property might get, consider upgrading your property or moving to a newer one
- If you’re struggling to stay up to date with legislation, consider hiring someone to help you keep track of everything
- Keeping up with technology can be tricky, but doing so will help you stay efficient and up to date
- Set realistic expectations for what your clients can expect of you, and then follow through on strong, fast communication and helpful solutions
- Interest rates might be high now, but they are showing signs of going down and will likely stabilize in the next year or so
Are you ready to get serious about your commercial real estate venture? The experts at DRK can point you in the direction of your ideal property. Plus, our team of commercial property management pros are always on hand to help you better serve your tenants, maximize efficiency and keep up with the latest challenges in the industry
Take a look at the purchase-ready commercial property available in the Columbus, Ohio, area right here.
Until next time,