Thursday, July 18, 2013

Goal Setting in Commercial Property Management

two people standing
Commercial property management goals are required.

The role of a commercial property manager is a bit different than that of a sales or leasing specialist.  On that basis the goals to be achieved should be different.  Work quality is really important in a commercial or retail real estate brokerage.  Everyone must perform as part of the total team.

When it comes to goals, you would expect that a sales or leasing specialist would focus on a mixture of the following:

  • Listings
  • Commissions
  • Time on market
  • Market share

You can track all of these on a monthly basis and then see where things are changing.  So what would you track and monitor from a property manager perspective?  Try some of these:
  • Arrears as a percentage of portfolio income
  • Vacancy factors in the portfolio
  • Time to respond to a tenant contact call
  • Time to respond to a maintenance event
  • Time to complete a  maintenance repair
  • Reports to clients being sent out on time
  • Time to respond to requests or calls from clients
  • Income earned from the portfolio

These points are all very good key performance indicators.  The fact here is that these numbers start to ‘blow out’ when a manager is under-performing or heavily loaded with work.  That’s when you see the errors occurring.

It is a sad fact that the ‘property management division’ in many brokerages are the ‘forgotten cousins’ of the business.  When things are going well, everyone leaves them alone.  When things start falling apart in the division, the whole brokerage struggles.

For a commercial property brokerage to thrive, it needs a very good management division that is operating at ‘peak performance’ all of the time; that includes the property managers and their work results.  It directly follows that sales and leasing opportunities for the brokerage will occur over time from a top commercial or retail property management service.

Tracking the actions and results of managers in their respective portfolios will help in client service, property portfolio growth, and the contribution of supporting fees.  The tracking process will also help expose under-performing or poor quality property managers.  Training or replacement of the manager can then occur.

So how can you do something with this?  Take these factors listed above, and make them central to the reporting process in the weekly team meetings.  In this way you can compare the numbers coming from each property manager or portfolio.  Any threats to the business and the portfolio can then be seen and responded to.

Whilst this may seem like a ‘witch-hunt’, the reality is that you must keep the property management division of a commercial real estate brokerage functioning efficiently and accurately.