Discovering How to Master Property Management Operations in CRE

Property management operations of commercial real estate (CRE) is a careful balancing act that can either make or break a property’s performance. To effectively operate a CRE property, a property manager must excel in facility maintenance, tenant relations, financial oversight, and regulatory compliance — and the often complicated interplay between each aspect.

Core Responsibilities in CRE Property Management Operations

• Facility Maintenance & Upkeep: Think of maintenance as the first line of defense against costly repairs and tenant dissatisfaction. Staying ahead with scheduled maintenance (and having reliable emergency maintenance contacts on speed dial) can save you from having to try to repair relationships with tenants later on. 
• Tenant Relations & Retention: When tenants feel valued, they’re less likely to leave, thus keeping your revenue stable. This is especially important in today’s competitive market, where a few bad reviews or a dip in customer satisfaction can have outsized consequences on leasing. 
• Financial Management: Smart financial management isn’t just about cost-cutting; it’s about creating a competitive edge that positions your property as desirable in the marketplace. Think investing into sustainable, energy-efficient, and tenant experience technologies.
• Regulatory Compliance: A property that upholds the highest standards of safety, accessibility, and sustainability has an easier time attracting tenants, and compliance is also essential for avoiding high costs. For instance, if you own a property in a city with new energy efficiency regulations, getting ahead of those changes by retrofitting the building can save you from the costly process of complying under a tight deadline. 

Understanding The Role of a CRE Property Manager

Take Julia, a property manager overseeing a portfolio of commercial properties. She begins her day early with her phone immediately buzzing with emails from tenants and vendors. The most urgent things get addressed first — like a plumbing issue in one of her retail spaces. She schedules an emergency repair with her go-to repair team and then heads out. 

Her first stop is a high-rise office building where she’s meeting with a contractor to discuss an upcoming HVAC system upgrade. The building’s management wants to ensure the new system is both energy-efficient and compliant, so Julia is there to supervise the meeting and make sure that the scope of work aligns with the property owner’s financial goals.

After that, she heads to a retail center that’s recently had some complaints from tenants about the state of the parking lot — uneven pavement and overgrown plants. So, Julia is inspecting the work and passing feedback along in person to the maintenance crew. As she walks around the property, she also makes note of broken signage at one of the entrances, a small but critical detail that could affect business visibility.

At her office, Julia spends a couple hours reviewing the financials of a few properties, a weekly task. She checks the portal to make sure no rent payments are overdue and enters the latest expenses into the property maintenance sheet. She also has to send a report to the owner of one of the office buildings, outlining its expected maintenance expenses for the next quarter. 

As a property manager, Julia is constantly juggling operational priorities — and the expectations of tenants, owners, and vendors. Well-oiled systems and processes help her stay a step ahead. 

Enhancing Operational Efficiency 

For a busy property manager often working on tight margins, finding creative ways to streamline processes and optimize resources is crucial to achieving the best property performance possible. 

Implement Tech Solutions

Property management software can automate routine tasks like rent collection, lease tracking, and maintenance requests. 

Systems like Yardi, AppFolio, or Buildium can reduce the need for manual tracking and reduce errors, minimize administrative time, and provide real-time insights into property performance. For example, automated reminders for rent payments can help reduce late payments, improving cash flow and minimizing tenant disputes. 

Choose a platform that integrates with other tools you may already use (e.g., accounting software) to make things seamless.  

Outsource Non-Core Tasks

Outsourcing specific functions, like landscaping, cleaning, or IT support, can free up valuable time for property managers to focus on core responsibilities. Outsourcing allows you to tap into experts while reducing the overhead costs of hiring full-time employees for every task.

For example, if managing seasonal maintenance becomes overwhelming, consider using a third-party service that specializes in all-around services like leaf removal, snow removal, de-icing, window cleaning, and lawn mowing so you don’t have to work with multiple different contractors. 

Routine Preventative Maintenance

A well-planned preventative maintenance program is key to reducing emergency repairs and minimizing downtime. Regular checks on HVAC systems, plumbing, and electrical systems can prevent big breakdowns and ensure that your properties stay in good working order. 

Set up automated reminders for maintenance tasks based on season or equipment usage to ensure things are done on schedule. And, if you operate multiple large buildings, it might be worthwhile to invest in predictive maintenance software that ties into equipment sensors. 

Enhance Communication Channels

Mobile apps or online portals can streamline communication between you, your tenants, and contractors — and make it easier for tenants to submit service requests, pay rent, or report issues. This can not only improve operations, but it can also help you build a better tenant experience. 

Implement a system that allows tenants more transparency so you can field fewer texts and phone calls. For instance, look for a system that lets them track the status of their maintenance requests and inquiries. 

Optimize Energy Use and Sustainability Practices

Smart thermostats, LED lighting, and energy-efficient appliances can cut energy consumption and lower utility costs for both you and your tenants. Additionally, promoting sustainable practices can make your properties more attractive to environmentally conscious tenants.

In an office building, installing motion-sensor lighting, energy-efficient windows, and UV tinting can significantly cut costs, especially for vacant spaces. Plus, these upgrades can even make the space feel more welcoming to tenants. 

Data-Driven Decision Making

Monitor key performance indicators (KPIs) such as vacancy rates, tenant satisfaction, and maintenance response times so you can actively identify areas for improvement. Plus, it’ll make reporting your performance to building owners that much easier.

Tenant Retention & Relationship Management

The secret to a positive tenant experience can be summed up in one word: Listen. It’s vital to listen to tenants’ concerns and feedback and address problems as they arise. Tenants should know that you care about the building and their ability to use it in the way that works best for them. 

For instance, if a tenant expresses concerns about noise in the building, you could dismiss it and say that’s the nature of a shared space. But a proactive property manager would take steps to mitigate the issue, such as installing soundproofing in common areas and getting to the root of the issue, like a noisy HVAC system.  

A quick response not only resolves problems but demonstrates that tenants’ concerns are being taken seriously. Here are some other tips for managing tenants well: 

Create a Sense of Community

Tenants who feel part of a larger network are more likely to renew leases and have fewer complaints about their neighbors. Tenant events, networking opportunities, and creating shared spaces for collaboration are all great ways to cultivate a special community atmosphere. 

Add Value Through Amenities 

Investing in features like EV charging stations and shared amenities can add substantial value to your property. Plus, existing tenants will appreciate that you’re actively improving their leased spaces. This can reduce turnover and make your building more competitive on the open market when vacancies do come up. 

Focus on Lease Renewals

Streamlining the lease renewal process can reduce turnover and vacancy rates. Consider using a system to automate lease renewal reminders and help with proactive communication about lease terms and rent increases.

Also consider incentive programs. For example, a commercial office building manager might offer an early renewal incentive, such as a discount on rent or free upgrades to the space, to encourage existing tenants to stick around.

Conclusion

Effective operations management isn’t just about maintaining the status quo; it’s about creating a well-oiled system that keeps tenants happy, reduces long-term costs, and positions your property for growth.