Saturday, 21 April 2012

Secrets to the Structure of a Commercial Property Management Proposal



In commercial real estate agency, it is common to be preparing a property management proposal to submit to the property owner following a sale or a lease. This is the most opportune time to seek a new management appointment.

The structure of a commercial property management proposal will be designed for the property, the landlord, and the general precinct location. Importantly the proposal should tap into the strategies and ideas that help the property owner to achieve better property performance through sensible strategies of lease performance, income, and expenditure control.

Here are some key ideas to help structure your proposal for the management of the property. You can add your specific agency recommendations around the model.


    1. An executive summary should always be placed at the front of the document. This allows the client to quickly grasp of the main strategies and outcomes that you can see as part of the management strategy.





    1. Summarise the property physically together with locational elements that impact tenancy mix or occupancy. This provides clarity as to how you see the property and how it can be managed.





    1. The lease and tenant mix management processes should be detailed within a section of the proposal. Care must also be taken in reviewing the tenancy schedule first to ensure that the leases are totally understood and accurately reflected in your recommendations. You should also be looking for occupancy matters that need to be immediately addressed after management handover; such as rent reviews, options, lease expiries, make good processes, and arrears.





    1. The daily maintenance and function of the property will require a specific management processes. The tenants, customers, and landlord each have a different relationship to the performance of the property physically; they all have needs in the management of the property. It is wise to review the special maintenance demands of the property and to make specific recommendations regards maintenance controls, plant and machinery management, and risk management that applies to property function. As part of this it may be necessary to talk to the contractors that supply specialised maintenance services to the plant and equipment.





    1. The property manager reporting processes to the landlord will be part of the property management service. Detail the relevant reporting systems that you can adopt and implement. The landlord may have other particular special reporting requirements to incorporate into the program.





    1. The financial reports to be provided to the landlord can be split into examples at the back of the document; this allows the landlord to see the comprehensive nature of your reports and controls. Normally the reports will include income analysis, expenditure analysis, budget status report, arrears report, tenancy mix strategy, tenancy schedule, and lease management report.





    1. The management of maintenance contractors associated with the essential services and major plant and equipment should be itemised. The major plant and equipment provides functionality to the property and tenant occupancy comfort. Any concerns that you may have here should be identified in the proposal.





    1. If the subject property is complex and contains a number of tenancies, it is likely that a business plan including a tenant mix strategy should be compiled. This helps the landlord to see just how you will implement controls across the tenant mix.





    1. Summarise the relevant personnel to be applied to the management of the property. In a large office or retail property the list is lengthy; it can include property manager, lease manager, engineer or maintenance manager, tenant services manager, and onsite management staff.




  1. The fees to be charged to manage the property should be itemised. In some cases they will be split into base management fee, on site management office costs, and the on-site management staff.


Within each of these main categories of your proposal, you will have recommendations and ideas regard particular things that should be immediately implemented in the property.

The property management proposal is prepared on the basis of relevance to the property and the needs of the landlord; not on the relevance of your agency to manage it (you will prove that anyway if your proposal is of high quality).

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