When to Outsource Commercial Real Estate Management

Managing commercial property is a hands-on job. There are tasks like maintenance, tenant retention, renovations, marketing and legal compliance to consider. Those responsibilities can become an overwhelming to-do list. Outsourcing your CRE management efforts offers a solution so you can enjoy a passive investment and focus on developing your portfolio.

If any of the following scenarios sound familiar, it may be time to consider seeking support from the experts.

Your Portfolio Has Expanded

If you’ve acquired multiple properties or high-value investments, you may reach a point where you struggle to manage those assets on your own. Different locations, varying lease terms and diverse compliance regulations require consistent attention to prevent small inefficiencies from becoming bigger issues. You could end up spending more time addressing property management issues than on portfolio growth.

Consider commercial real estate outsourcing if you notice:

• Increased reactive maintenance
• Delays in your communication with tenants
• Missed deadlines for lease renewals or rent escalations
• Personal burnout

When you hire a CRE property management team, the weight of optimizing your assets is taken off your shoulders. Professionals have the training, technology and experience needed to handle daily operations and reduce errors.

There’s High Tenant Turnover

The landlord-tenant relationship is the foundation of a successful property investment. But you could struggle if you face extended vacancies and a lack of prospects. If you can’t maintain consistent communication or your portfolio development occupies your attention, outsourcing your property management can help you improve tenant satisfaction.

A hired team will actively manage ongoing relationships, answer inquiries promptly, coordinate tenant improvements and handle lease negotiations. Transparent exchanges, smooth renewal processes and property improvements can also help promote long-term lease renewal.

You Face Increased Operational Costs

An increase in maintenance, utilities and insurance costs can shrink your margins to razor-thin levels. Those variables make it difficult to plan for growth when you’re struggling to manage short-term expenses.

Here are some common signs of CRE operational cost issues:

• Higher per-unit maintenance
• Inefficient vendor contracts
• Unpredictable energy bills
• Inconsistent reporting across properties

Professional commercial real estate managers offer specialized expertise because they’re well-versed in cost control and vendor negotiation. They can provide consistent oversight and track expenses across several assets. That allows you to make informed decisions, control costs and stabilize or increase your net income.

There Are Compliance and Risk Management Issues

The regulations for commercial real estate evolve constantly. That makes it difficult to keep your properties compliant, especially if you own multiple locations. Building, fire and environmental codes vary by jurisdiction and property type, too. Outsourcing commercial real estate management provides structure and accountability when it comes to compliance processes. You can count on your team to stay up to date on local safety codes, inspection requirements and legal rulings. Their efforts reduce the risk of citations and fines that would affect your operating budget.

You Want to Focus on Investment

Commercial real estate is an effective source of passive income. However, you may have issues making the most of your investment if you’re concentrating on daily operations. Sharing management responsibility with a dedicated company allows you to focus on acquisitions. You can delegate tasks like tenant communications and vendor management to your team, freeing up your time for asset expansion. If you have internal staff, they’ll have the flexibility to evaluate markets and focus on underwriting.

You’re Managing Special Projects or Transitions

Renovations, system upgrades and new acquisitions require greater coordination, placing increased stress on your internal staff. Those projects also compete with daily goings-on, which can create negative experiences for your tenants.

You also have to consider tasks like:

• Coordinating contractors
• Managing budgets and timelines
• Overseeing transitions
• Ensuring regulatory compliance

An outsourced property management team will dedicate its time and resources to keeping your projects moving forward. They can also set clear expectations for your tenants and provide regular updates regarding potential service disruptions.

Outsource Your CRE Management to DRK and Company

You can create an asset portfolio that works for your unique investment requirements and management expectations when you partner with DRK and Company. Our team knows the Columbus, Ohio, real estate market inside out. You can count on them to provide unique insight to take your CRE ventures to the next level. Learn about our property management services and contact us to schedule a consultation.