Magazine article Journal of Property Management

Left-Or Right- Brain Dominant? Firms with Management and Leasing under One Roof Can Be Both

Magazine article Journal of Property Management

Left-Or Right- Brain Dominant? Firms with Management and Leasing under One Roof Can Be Both

Article excerpt

In many ways, when under the same roof, a leasing broker and a property manager might be imagined as the right and left side of the brain.

The property manager--specializing in knowledge such as long-term privately held properties, details about sales figures in a retail center or activities of a major tenant planning improvements--serves as a center for processing data and as a valuable resource for intimate knowledge of ownership investment criteria.

The leasing broker, on the other hand, handles global information, such as which competitors are offering particular incentives, development and growth in the area, etc.

Real estate firms handling both the management and leasing of a property hear it time after time from owners, asset managers or anyone outside of our industry: "You only want both sides because you will make more money."

While it is true that a firm awarded both management and leasing of a property will earn more than if they were only earning either management fees or leasing commissions, what is often missed is the fact that having one firm handling both aspects improves services to the property, reduces costs and may ultimately be better for the property, its occupants and the owner. Bringing operations under one roof increases the quality of communication within the firm, bolstering core operations and the bottom line.

ANOTHER SET OF EYES AND EARS

A property manager's role is to carefully and correctly care for a real estate asset, including managing the physical aspects of the building, caring for the tenants' needs and ensuring that financial obligations are met. Property managers are intimately familiar with each property, knowing every physical detail and dollars in income and expenses. What they may not be as intimately familiar with, however, is the larger marketplace around them. Experienced leasing brokers working closely with the management team can supplement the property manager's efforts with an additional set of eyes and ears attuned to the larger marketplace around them.

Consider the standard Americans with Disability Act (ADA) compliance clauses in most lease templates. A lease may require a landlord to maintain the common areas in compliance with current ADA regulations, which a tenant, the tenant's representative and the landlord's broker may consider innocuous and obvious. But the landlord's broker may not be aware that the property is not required to comply with the most current ADA regulations whether because of age, use, waiver, hardship or any other reason.

If this fact has never been conveyed to the broker or the property manager is not given the opportunity to review and affect the lease before execution, the landlord may be responsible for capital costs that could have been avoided, or even subject to default in the possibility that there are physical limitations barring complete compliance. …

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