It's another Year Charlie Brown!

As we celebrate the end of another year, and look forward to starting all over with our resolutions, and tsk tsking about how fast time flies, I'm hoping for you the following property management well wishes for 2017:

That your toilet never overflows

That your sink is never stopped up

That your HVAC system keeps you and everyone around you comfortable

That you don't slip and fall on any liquids anywhere you tread

That no breakers flip no matter how many coffee makers and space heaters are plugged in

And finally--that raindrops do not fall upon your head as you work at your desk!

If all of those holiday wishes come true, your faithful property managers will surely find something else to worry about.

Be safe as you celebrate the new year, and watch for more typical property management topics starting next week.

Merry Christmas from the Fam-i-ly

There is only one more shopping day until Christmas.  It's likely most of you have left the building by now, as has Elvis, to salvage what shopping you can wring out of this Friday.  Good luck with that. 

Hope you all enjoy your Christmas on Sunday.  Be nice to that family member you only see this one time a year and want to throttle before the end of the day, you'll have a whole year to get over it!

 

Denouncing The Lowly Space Heater

I say lowly because it is low, it's under the desk!  As we get closer to having to real, honest to goodness cold weather, I am reminded of that loathsome little device.  As property managers we try to discourage them, they use a lot of electricity, they are a fire hazard, and they make it more difficult to control the temperature overall.  Not that any of that matters.  If someone wants to use one, they just do it, and there's little we can do to stop them.

My favorite meme on the space heater use is not the wintertime use, however, it's the person who is so cold from the air conditioning in the SUMMER that the space heater gets turned on under the desk.

I feel for that person. There's a sweater on the back of their chair, the space heater is under the desk, and it's cranked.  I just hope the sweater doesn't get too close...

Denouncing The Lowly Space Heater

I say lowly because it is low, it's under the desk!  As we get closer to having to real, honest to goodness cold weather, I am reminded of that loathsome little device.  As property managers we try to discourage them, they use a lot of electricity, they are a fire hazard, and they make it more difficult to control the temperature overall.  Not that any of that matters.  If someone wants to use one, they just do it, and there's little we can do to stop them.

My favorite meme on the space heater use is not the wintertime use, however, it's the person who is so cold from the air conditioning in the SUMMER that the space heater gets turned on under the desk.

I feel for that person. There's a sweater on the back of their chair, the space heater is under the desk, and it's cranked.  I just hope the sweater doesn't get too close...

ADA and TAS - Do you know the difference?

And do you care?  Well if you're reading this blog I'm guessing you just might.  Property Managers don't get a pass on caring about accessibility for our properties.  Most of us in real estate know the acronym "ADA" as representing the "Americans with Disabilities Act."  On the other hand, "TAS" stands for "Texas Accessibility Standards."  Maybe you still don't care, and that's OK, but I must press on, because I think there's a nugget of interest, so keep reading - if only to keep me company.

When we have "accessibility" consultants evaluate a property, and we get a report from them.  Their report is all about the TAS, not ADA.  They are actually different, who knew? (please try to keep reading).  As long as the state's standards are at least as strict as ADA, each state can have its own, and that is what Texas does.

Let's say a property owner spends at least $50,000 on construction alternations at their property--that suite or area being constructed must meet TAS standards, which start from the point at which a disabled person parks their car in the parking lot, then follows the "path of travel" into the property and to the constructed area, including the bathrooms along the way.  It can be daunting to meet those standards.  You hire an accessibility consultant to evaluate the property before and after the project, and they file a report with the TDLR (yes, another acronym) which stands for the Texas Department of Licensing and Regulation.  If the "after" report still documents deficiencies, it's sort of like it stays on the property's "permanent record" (wasn't that phrase in a movie or a song), and the property owner can be subject to fines/penalties until the deficiencies are corrected.  If the cost of meeting all the requirements cited in the report cannot be met by the owner, they can request additional time to correct them, and that time is usually granted, sometimes in our experience, multiple extensions are sought and granted.

It's a bit complicated, but it's worth our time to keep up with it to avoid the state levied penalties.   You can run, but you can't hide...from the MAN (No that's not another acronym).

When a Ship Becomes a Building (Not a good thing)

Next Wednesday, December 7, 2016 marks the 75th anniversary of the bombing of Pearl Harbor.  On December 7, 1941, a little after 8 am in the morning, hundreds of Japanese ships approached Hawaii from the east, and began the attack.  It lasted only about 2 hours, and by the time the Japanese left, 20 ships, and 300 aircraft had been destroyed.  2,000 American soldiers and sailors were killed in those two hours, and another 1,000 wounded.  The day was described by President Franklin Roosevelt as a "Day that will live in Infamy," and as every one who is at least as smart as a fifth grader knows, was the event that pulled America into World War II and ultimately led to victory of the allied forces of the US, Great Britain, Canada, and Russia, among others.

As I thought about the anniversary of this most tragic event, and all the history spawned from it, eventually my property manager brain found the hook I needed so I could indulge my impulse to write about it here.

One of the ships that was sunk that day, the battleship Arizona, was left at the bottom of the harbor after the attack. The ship's 1,177 sailors and Marines were "buried at sea" with the ship, and the site has become a museum in the US National Park Service for Americans to visit and honor their sacrifice.

So it is that a ship became a building. By creating a museum of this historic and sacred place, the Park Service has given us all a window into the horror of war, and perhaps that view will help make another world war unthinkable.  This photo I found of the site shows the floating "museum" sitting just above the ship in the harbor, as a boat is unloading visitors.  Apparently parts of the museum extend below the surface of the water so visitors can see the ravaged ship up close.


I can't imagine what it must be like for the Park Service to maintain this "building" but I'm sure it is a property management challenge unlike anything my team faces.  I appreciate the effort by the Park Service to help us all to remember our history.  I hope everyone takes a minute to remember the sacrifice of the brave men who died that day so that as Americans we can live in freedom today.

What we're Thankful For

You're probably not in the office today, this post will go out the day after Thanksgiving, 2016, which is November 24.  And that's one thing to be thankful for, that you're off today.

Then there's where we get to live.  Yes, Texas is hot for much of the year, but right about now we're not thinking about that.  We're glad to live without snow and ice, with sunny skies almost all year long.

Think also about who we get to work with.  I am thankful for my "work family," who have my back every day, and who work every bit as hard as I do to keep us all on track, pursue our goals and keep our company growing.  I can't imagine doing what I do without every single one of them.

How thankful am I for our clients?  Well, without them we have absolutely nothing.  No properties to manage, no tenants to keep happy, no "work family" however much we care about each other.  I want only to keep getting better at what we do so our clients can't live without us, gratitude drives me to be the best we can be.

I could probably go on, but it's your day off.  Feel free to be thankful for a short blog post today!

Caveat Emptor and the Hailstorm

One of the first terms I learned in real estate is the concept of "Caveat Emptor," which means "Let the Buyer Beware."  Nothing in property management better represents this term than the circumstances surrounding hail damage.  As we head into winter, I'm thankful (hopeful?) we won't have to worry about thunderstorms raining hail down on our expensive rooftops and HVAC units exposed like sitting ducks, because if/when it happens, we then have to evaluate sales pitches by roofers/general contractors, some legit, some maybe not so much...as they promise MANNA from our insurance companies.  They will say: We'll get you a new roof!!!  We'll get you new HVAC units!!! Hallelujah brother!!  There's just this little voice in my head asking:  Is it true?  If it is true, is it right? 

Even if it is true and even if we believe it is right for us to pursue a claim for our client, what does it mean for our future premiums and those of other property owners?  It's definitely a "buyer beware" situation. A newsletter published by "Texas for Lawsuit Reform" recently outlined exactly this conundrum. 

The column cited concern for the potential of abuse by what they called the "Hail Cartel" which they defined as unscrupulous roofers, public adjusters, and attorneys intent on getting as much as they can from the insurance industry.  In this scenario the property owner may believe they benefit by getting a new roof/HVAC system, but if the contractor you're working with is, um..shall we say...ethically challenged, can you trust their workmanship?  I don't think so.  Caveat Emptor indeed.

Santa Cop is coming...to Arlington

There are lots of toy drives that will start to collect this time of year.  One us Property Managers, the favorite is the "Santa Cop" program in Arlington.  The Arlington police department and the Arlington Police Foundation, and the Arlington School District join together to distribute boxes to businesses, for us building lobbies, and we do our best to fill them up.  All our managed buildings will get a box any day now, and we'll encourage our tenants and their employees to bring a new unwrapped toy.  

Once the toys are collected, the groups have a great party for as many families as possible, last year it was over 1,200.

We will do part to make 2016 the best ever.  We're glad to contribute what we can, and we especially enjoy working with Arlington's finest to get it done to help every kid in Arlington have a great Christmas.  If you don't already have a way to help bring Christmas smiles to kids faces, I can heartily recommend that you grab your santa cap and call the Santa Cops.

Burning topic of the week...ICE MELT

It's 90 degrees in the shade in north Texas right now, it is mid-October, football is on a constant loop on all the channels, and did I mention it's 90 degrees in the shade?

Still, we property managers must plan for rain, sleet, snow and all the same things that keep the post-person slogging through to bring you your mail.  So in this week's PM huddle, the subject of ice melt came up, and whether we are prepared for the rare but inevitable sleet event.  The only question is when.  We stocked up last year, and didn't use a single bag.  Complacency could bite us this year, so we thought it through.  Do we have enough to go around to all the properties?  Do we have a landscaping company on board to get out (just) ahead of the storm to put it out?  Do we have them scheduled to come clean up the residue after the sun comes back out?

The toughest part of a sleet event for us?  It's whether and when to get in our cars and come to work. We north Texas drivers don't have much experience with the subtleties of steering into skids, and our municipal authorities do well just to sand the overpasses.  People die on slick roads.  I prefer no one does that for the sake of getting to an office building thank you very much.  But the tenants expect us to be providing service whatever the condition of the roads.

We communicate early and often with our tenants, keeping expectations reasonable while admitting our own frailty to stand up to scary icy roads.  If it's dangerous, we stay home until it's not dangerous, that's where we come down on the subject.

Check that electrical connection Sparky

As promised, in this week's blog post I thought I would summarize the content of the session my property managers and I attended on the need for electrical preventive maintenance.  We have already been practicing PM for our electrical systems, mainly thermography of our electrical panels.  We thought we had it nailed.  Get a thermographer onsite every couple of years, and make the fixes they recommend.

Well, according to the presenter of this session at the expo, that plan was not good enough. Resistance testing, visual inspection of connections are also an important part of electrical preventive maintenance.  And to be the most effective, it should be done every year.

And then every 3 years, there should be "de-energized" maintenance.  Yes, that means turning the power off to the whole building, and checking it all out.

I guess we will be re-considering our electrical maintenance program.  
 

Reporting in on the North Texas Facilities Expo

Wednesday October 5 our Property Managers attended the North Texas Facilities Expo.  It is a difficult proposition to work "on" the business, not just "in" the business.  But we took a day, and went to see what was new and different for property managers.  And the day was a success.  It helps that it was FREE.  We attended a session on electrical preventive maintenance and another one on maintaining fire/life systems.  We also spent time on the exhibit floor meeting vendors.  As we made our way around the exhibit hall, we were surprised how many vendors we already knew, but we also made a number of new contacts for vendors we might want to use.  We definitely got a few ideas.

One idea - door mats - I know, who cares about a door mat.  The vendor mentioned that one application for their mat is to put  "This suite available" on the mat, with the leasing agent's number. Used for retail suites.

Another - roof drain covers - equally exciting, I know.  The thing is, roof drains get clogged and damage is done.  Enough said?  These covers are virtually indestructible and keep out the smallest of particulates to keep the drain clear.

Roofs - Two of the roof vendors we talked to use drones...yes drones...to inspect roofs.  We're definitely bringing these guys in to our PM Huddle to make a presentation.

I'll talk about the sessions we attended next week...

Property Management...It's not like Baseball

Forgive me but I can't help but blog about baseball this week.  We're in the middle of the playoffs and the world series is just around the corner.  Comparing what I do to what others do is a "brain pastime" for me, whereas baseball is "America's pastime."

To me the most striking difference is in the stats.  There's an expression in baseball "batting a thousand." No baseball player has ever done it.  If a player's batting average is anywhere near a third of that, or .333, they are celebrated as hugely successful.  I imagine a scenario where only a third of the time we property managers get the toilet fixed, a tenant's temperature adjusted, or the trash picked up.  It's not a pleasant thought to imagine failing 2/3's of the time, but one I find interesting nevertheless.

It's all about the skills.  Put me in a major league baseball game with a bat in my hand and it's more likely I'd be running away from a pitch coming at me at almost 100 miles per hour, not trying to knock it out of the ball park.  Put a baseball player in my shoes, and maybe he could get the basics of the trash pickup done about as well as I could.  But could even an MLB player find a creative solution to a tough problem at a property, and do it for every single problem, not a third of them?  There's a good reason why properties with professional property management command considerably higher prices than those without.

It's fun to watch baseball, and I get that the two professions can't really be compared.  I do think, however, that because the property management professional solves problems all day every day, they could be considered the "sluggers" of the real estate business.

Is The Ball In Your Court?

I had lunch a few weeks ago with an important mentor from my early days in the property management business.  William A. (Bill) Lawley, CPM, had so many influences on my life that I decided to blog about him.  Bill was President of Swearingen Management Company in those days (80's, yes it was a long time ago), I was his fairthful servant in all things property management. 

When we had lunch, I mentioned to him that I use some of my "Lawley-isms" ALL the time.  There were a few in my memory ready to be tossed off at a moment's notice, which I did right then and there. We both got a good laugh, but actually, I was very serious.  Maybe it was the repetition, I’m just now recognizing!  It does seem now that Lawley had to say things to me over and over.  Like when I would ask him how I should respond to a particular tenant request, he would say to me:  "What does the lease say?"  He said that to me, umm, multiple times before I finally started checking the lease BEFORE I asked him, and often once I checked the lease, guess what?  I found I didn’t have to ask him, which I realized much later was his whole point.  Now I find myself turning the question around with others just like he did with me.

Often I would tell Lawley something that I was 100% confident about.  His response to me was usually "OK, now what is the other side of this story? "Uh, what other side of the story? I would say.  I just told you...don't you believe me?  "Sure I believe you, he would say"  but I also know that there are at least two sides to every story, and I want to hear it.  Over time I slowly began to see the world less in black & white, and more in the grays that are inherent in our lives.   I now realize he had to say this to me a number of times also.  Geez.

There are so more, but a blog post has to end at some point.  I'll close with his admonition to me to "Get the ball out of your court as quickly as possible."  Talk about words to live by.  It's a Lawley-ism for the ages.

Where does your carpet go to die?

No, it's really not a slow blog day.  I just skimmed an article in the trade publication Building Operating Management about this.  Consider a statistic quoted by the article:  "Recycling one ton (2,000 lbs) of VCT (vinyl tile) saves 2,670 gallons of water, the equivalent of 70 kiddie pools."  This is from Armstrong Commercial Flooring, not exactly your typical tree hugger.

As Property Managers, we make sure the tile gets installed correctly.  When it's time to replace, where it goes, nobody knows...right?  A few years ago I had a conversation with a colleague who was involved in the early stages of carpet recycling, it sounded like a good idea, but at what cost of effort, energy, and yes, dollars, to make that happen? 

As this article outlines though, the effort to recycle or re-use flooring materials is starting to go mainstream.  There was even a "third party" re-use company mentioned that I googled, and it seems to be legit - a representative from http://www.repurposedmaterialsinc.com was quoted in the article. Apparently this company takes in materials and either re-use them as they are, or for a different use. An example cited was a basketball court - once it's sanded three times, it can no longer be used for a basketball court, but it could easily be used in a restaurant or other retail store.

As I have mentioned before, our company buys carpet and vinyl flooring in bulk from the manufacturer (used to be Patcraft, now is Mohawk).  Maybe recycling the old carpet is not such a big leap after all.

 

JPM Article: Project What You Expect - Will Do!

There's no sugar coating it, this is budget season.  Everyone I know in Property Management is knee deep thinking about 2017.  I read the Journal of Property Management, and a recent article about budgeting, Project What You Expect caught my attention.  The main take away for me, reflecting my own bias, is that a budget is a "living, breathing document."  Back in the day, it was common practice to spend September and October reading our crystal balls and sending tomes of paper purporting to declare to our clients rosy leasing projections and reasonable operating expenses, resulting in copious cash flow.  Then we would explain variances throughout the year.  A valuable lesson I learned goes something like "Keep It Real."

Now that I'm in a position to organize the budget process, I am applying that valuable lesson.  Our budget format is a constantly updated excel document that gets updated with every lease renewal, move in, move out, and rent increase.   There's a tab for Property Managers to list any cash outlay not considered an operating expense.  The operating expenses themselves don't change all that much from year to year, so by capturing the tenant income changes and one time expenditures, we can pretty much take a look at the budget any time and get an idea of the cash flow for the next few years. What we don't do is budget leasing.  That violates my Keep it Real rule.  If we budget leasing, it's just a guess, and guesses don't pay the bills.

To read the JPM article, click HERE

Do You Know CPR? We AEDo!

A huge part of our culture is being goal oriented.  We find an endless number of ways we can improve, whether that's good news or bad news I will reserve for another post.  Anyway, for 2016, Property Managers and Maintenance Engineers set a "Sharpening the Saw" goal (continuing education) of completing at least 8 hours of outside training.   We put our heads together and decided to host a CPR training course as a way of achieving the goal.  We now find ourselves red cross certified to provide first aid and CPR. Who knows when one of us will be called upon to use our training, but given our role in the buildings we manage, we all feel better having the skills we learned that day.

That day we also trained on the use of AED devices.  AED stands for Automatic Defibrillator Device. Used correctly it can supplement CPR by delivering a mild electrical current to re-start a person's heart if needed.  We learned that if an AED is around, it greatly improves the survivability of a cardiac arrest.  In August we had a representative from the Red Cross address one of our PM Huddles to discuss how to install and deploy them in our buildings.  

When we set that training goal we didn't realize it would lead to adding AED devices to our buildings, but we're happy to be taking our training as far as it can take us, because it's the right thing to do, and by adding these devices to our properties we are showing our tenants that we care about the well being of their employees. For our owners, we're taking care of their customers. I do love a win win!

Have a Great Labor Day 2016 with documentary: Trash Dance

I am smitten with a documentary I just saw on PBS called Trash Dance directed by Andrew Garrison. One reviewer wrote:  Austin Choreographer Allison Orr finds beauty and grace in garbage trucks. The documentary follows Allison for over a year as she works with sanitation workers in Austin to develop a dance recital with the tools of their trade, from one individual picking up trash to 16 trash trucks, cranes and workers lifting cans and working levers to music--performing for an audience of several thousand people in the rain in Austin.  No tax dollars were involved, only private grant money and time of these unsung heroes went into the project.  I don't know whether you may have contemplated how and where the trash on your curb goes and how it gets to where its going, I cannot claim to much expertise on the subject.  This documentary tells some amazing stories.  I recommend it.

If you've been following my blog for long, you know by now that I find inspiration for being a Property Manager from just about everything I come in contact with, and Trash Dance is no exception. Like the individuals who are portrayed in this documentary, those of us in Property Management sometimes feel we labor in obscurity, that we only deal with problems, that we don't get credit for keeping the lights on and the toilets flushing.  Seeing this documentary reminds me, and I hope everyone who maybe sees themselves in less than "sexy" occupations take heart that their work has as much meaning and value anyone else's.  For this Labor Day 2016, here's to all of us who keep the trash picked up.  Hope you have a wonderful Labor Day Weekend!

Are office buildings going to the "dogs?"

You've probably seen articles touting progressive pet friendly company policies that allow, even encourage employees to bring fido to the office.  When I read those articles, I can't help but wonder whether the company checked with their landlord to see if it was OK with the landlord to have the employees bring their dogs to work.  I may be reaching here, but I doubt fido is being welcomed with open arms by the owner of just about any building.

Why, you may say, wouldn't it be OK to have man's best friend around at work?  Our four legged friends help us relax, the studies say, our blood pressure is lower with them around, etc etc.

All I can say is:  there is a reason why apartments charge pet deposits and even higher rent for those residents who have pets.  Carpets get ruined, waste has to be picked up, dog bites happen, not to mention the insurance, allergies and other issues relevant to companies who would bring their dogs into common areas shared by other tenants.    

So far it hasn't really been an issue for us, aside from one "therapy" dog in one of our properties, most of our tenants leave fido at home.  I'm glad, and I'm also hoping our buildings don't have to go to the dogs to keep our tenants happy.  I have a feeling that may make me old fashioned.  Oh dear.

Food for Thought - is Expertise an Illusion (or even a DE-LUSION?)

In the most recent edition of IREM's Journal of Property Management, a thought provoking article "Expertise and the Illusion of Knowledge" took the position that a person's Expertise, and in our case specifically Property Management Expertise, can REDUCE the quality of your decision making and the accuracy of your work.  How, you may ask?  The article defend its thesis by citing a book published in the last few years by Dr. Atul Gawande called The Checklist Manifesto.  Dr. Gawande argued that the same concepts that prevent errors by pilots, the extensive pre-flight checklist, should be adopted by medical professionals, specifically surgeons, as a way to reduce medical errors that have the potential to ruin lives.  Surgeons pushed back hard.  Look at their long training, their cumulative skill, their EXPERTISE!!! they said.  Who could question that they know what they're doing???  Yet Dr. Gawande provided lots of research that supported his checklist argument, not the surgeons expertise argument...sorry about that.

So if it's good enough for pilots, and if eventually medical practitioners begin to implement checklists to improve the accuracy of their life saving work, why on earth wouldn't  real estate professionals, and again, specifically Property Managers, also buy into the idea of improving our work through checklists?  I can't think of a single reason why not.  I completely agree that we consider ourselves "experts" at our peril, that we should always question what we think we know.  Only by doing that can we truly grow our expertise.

I can also think of times when sometimes there is no right answer, and when we have to find a creative solution.  In that case, expertise may carry us through.  In addition, those of us who are in the property management trenches every day know that it's hard to find time to work "ON" the business (i.e. create the checklists), not just "IN" the business.  I can just hear our customer's saying:  "So what, do it anyway."  And I agree, and so we do, through our huddles, our ongoing training, and yes, the checklists we have so far.  Are we perfect?  Hardly.  Are we perfectly committed to improvement?  Absolutely.

The Checklist Manifesto:  How to Get Things Right is available here at Amazon

 

Tenant Retention Tips - (CBC Blog) Part II

Posting from the CBC Blog again - Part II of tenant retention tips - Enjoy!

August 15, 2016

Tenant Retention Tips: Part II

The Coldwell Banker Commercial® organization offers these tips in continuation to “Tenant Retention Tips: Part I” to assist in retaining tenants:

1. Communication is Key
Make sure you communicate with your tenants on a regular and consistent basis throughout their tenancy.  Let them know if there is a scheduled maintenance such as parking lot cleaning.  Tenants don’t mind being inconvenienced once in awhile as long as they are aware and can make the necessary arrangements.
2. Ask What Would Make the Building Better
Another great way to increase your relationship is to speak to your tenant and inquire as to what would make their environment better to work in.   Tenants might have ideas, but don’t openly present them.  Many times, it may be something really small that could make the world of difference.  If it is a bigger item, it may be possible to amortize the cost in the general operating expenses if all the tenants will benefit from the suggestions.
3. Send Your Tenants Anniversary and Holiday Cards 
This is a simple thing that can go a long way.  Write your tenants a hand-written note inside.  Another idea is to give your tenant a small gift, like a DVD player, when they first move in.  It is small, but they will realize you are not an ordinary landlord.
4. Improve Property Energy Efficiency
In today’s market, efficiency and sustainability are very current issues that more and more tenants are acutely aware of. If your property is inefficient, cold or drafty, a tenant won’t want to extend their tenancy.  That inefficiency can translate in higher operating costs. There are many federal programs and tax advantages to retrofits of properties that result in efficiencies and reduced operating costs. These will go a long way to helping retain tenants.
5. Improve Property Grounds  
Maintaining the front door to your property and the common areas where people walk thru on a constant basis is an often overlooked and important tool to help retain tenants.  Plant flowers in the front of your property.  Keep the parking lot clean, the grass mowed and the bushes trimmed.  Make the property inviting to come into work.
6. Offer a Re-Signing Bonus for a Lease Extension  
The simplest and easiest way to incentivize your tenants to stay is to offer them a discount for signing a new long-term lease.  Consider how much money and time it would cost you to find new tenants.  Look to incentivize your tenants for signing up early, possibly with free rent, a larger tenant improvement allowance, reduction of security deposits, an offer to refresh paint or carpet during their lease term, etc. (Note: be proactive with such a program and start two years in advance of the expiration of their lease, to encourage them not to look at other options).
7. Rent Reductions
If a tenant gives notice because they can’t afford to continue renting the property, consider revising and extending their term to help get the rent down or draw a new lease up for a longer period of time. Repositioning the lease is better than having them move, potentially losing rent revenue or the required new and likely larger capital dollars to make the space ready for a new tenant.
8. Why Are They Looking to Leave?
Always cross-examine the tenant on why they want to leave when they give notice.  It’s vital to find out their objections to try and overcome them. Sometimes it’s an issue you can’t do anything about, such as lack of space, but other times it’s something simple that’s easily resolved and encourages them to stay.
View Part I: Tenant Retention Tips
By the Coldwell Banker Commercial Organization

Retain your tenants - CBC Blog - Part I

I'm pleased to be able to share from the mother ship CBC blog some tips for landlords (and their property managers) for holding on to your tenants. In our property management huddles we spend time on this topic because we all agree it's a good idea keep your tenants happy in their office home.

It's way too expensive to replace them, right?  Right!!  Enjoy...and watch for Part II in my next post.

http://www.cbcworldwide.com/blog/tenant-retention-tips-part-i

Carol

08 Jun 2016

Tenant Retention Tips: Part I

Obtaining new tenants can be a costly affair for landlords. If tenants are dissatisfied, given today’s market, they can easily seek new space. It is always the preferred option to retain good tenants – those who pay their rent on time and cause little or no problems.

The Coldwell Banker Commercial® organization offers these tips to assist in retaining tenants:

1. Meet Your Tenant
Even though the property was bought as an investment, you are still in the people business and going out of your way to meet up with lessees can lead to longer, more meaningful dealings between yourself and your tenant.  Also, understand their business and business model.  They may have unique requirements.
2. Don’t Get Complacent
A long-term tenant is a valuable asset in a saturated rental market, so make sure you keep on top of all those little jobs that will make it easier for the tenant to feel like it is a good working environment.

• Maintain the property in the best possible condition; make sure equipment if up to date
• When the tenant reports maintenance problems, sort them out immediately
• Issues involving water, electricity, heating and air conditioning or safety should be resolved inside of 4 hours with a follow up to the tenants.

3. Have the Right Attitude
Show that you’re fair-minded and understanding.  Don’t act like the tenant is ‘bothering’ you when they call.  Be pleasant and show concern for their needs.  Don’t ignore their questions or distresses.
4. Replace a Minor Item at Least Once Every Year
Have a plan to maintain the property on an annual and rotating basis so you are constantly generating a fresh appearance. Keeping up with some of the competing buildings will make a tenant see you care about the property and they will be less inclined to look around for unnecessary reasons. Amortized over time, the minor expenses don’t cost that much.  Plus, they will be attractive to new tenants, and they increase the value of the space.
5. Tenant Improvements
Requests for improvements should always be considered.  Be open-minded and flexible with the tenant’s space.  The tenant can always restore the space to its prior condition if agreed.
6. Respect Their Space
When landlords meet tenants in their property, be respectful, friendly and informal.  Avoid disparaging comments causing them to be unsettled by voicing possible future plans that are adverse to the current tenancy.
7. Pro-active Problem Search
Perform regularly scheduled “preventative maintenance checks.”  Make sure the tenants are aware of when such things are scheduled.  Performing these checks demonstrates a proactive approach as opposed to a “wait and see” and allows you to find issues before they escalate to a stage where they hand in their notice. Always ask if everything is acceptable or if the tenant has any problems.
By John Boyer, Senior Director of Marketing, Coldwell Banker Commercial Affiliates

Outsourced Vesting - sounds like an oxymoron?

I have a subscription to the trade magazine Building Operating Management that I often just skim because so many of the articles are devoted to "facility management" that I don't find them all that relevant.  It's great to do a deep dive into how to get your building occupants to re-cycle their plastic bottles, for example, but the advice is a lot more relevant when all those occupants work for the same company.  Not so much for those of us who manage properties with multiple tenants and multiple outlooks on the benefits of re-cycling.

But I was intrigued with an article in the last edition, it was called  New Strategy Could Shake Up Outsourcing,  and reports on a supposed trend in facility management that places emphasis on the Vendor/Provider to add value, contribute to the facility's success, etc.  I understand the perspective of the article, that it may be difficult for an attorney who gets paid $350 per hour, or the janitorial company who gets paid x cents per square foot to view their service from the perspective of the building owner. That is exactly, however, what property management, at least excellent property management, is all about.

The article provides a roadmap of sorts for the facility manager to help his or her service providers to view the relationship as a "WIIFWE" or What's In It for WE, a tweak of the phrase WIIFM, or What's in it for ME.

I think the reason it's easier for me as a Property Manager to think in terms of WIIFWE is that in almost every case I can think of, my client will judge my performance by what the value of his property does over the period in which we manage the property.  It is often the reason why mortgage companies will require owners to hire a professional management company.  They know that professional management, especially those companies (like us) who are invested in improving property value, will more than pay for the cost of their fees in what they do every day.  Increased property value is shorthand for all the good things that come along with it, from curb appeal, low tenant turnover, and fewer headaches from deferred maintenance, just to name a few.

So I totally get the "Vested" approach in choosing service providers, I just find myself glad that it's a concept that does not need explanation in my office.

Still scratching our heads over R-22...Time to call the pros

We did a bit more research, got everyone together to review what we knew, and the first thing you know we found ourselves all tangled up in the numbers...R-22, MO99, 134A, 410A.  Nex thing we knew one of us gave up and started reciting the phone numbers from an old cornball TV show "Hee Haw"  BR549 and a song from the 50's about a phone number.  

At that point we knew we needed help, so we called a vendor, and he called a refrigeration expert from United Refrigeration, and we scheduled a meeting.

It was a good idea, because this time we learned something.  We learned that:

1) We don't need to panic.  Yes, R-22 refrigeration will not be manufactured in 2020, but there's lots of it around, and the experts estimate it will continue to be around for another 10-20 years, gradually increasing in expense, but available.

2) All new HVAC units will be using one of the two newest refrigerants 410A or 134A (depending on the size of the unit).  It's a good idea to make sure you verify this with your HVAC vendor though, just to be on the safe side.

3) The possibility of replacing R-22 refrigerant with a new EPA approved refrigerant depends on the size of the unit.  

So our next step is to apply the criteria we were given to determine which of the properties in our portfolio qualify for the retrofit, because if we can get ahead of the issue, we want to, and we want our clients to have the best information and options they can.  

Is it R-22 or R2D2 - That's what I want to know...

One of our Building Engineers is investing in his career by pursuing a certification from BOMA - Building Owners and Managers Association.  BOMA's educational offerings are made through Building Owners and Managers Institute, or BOMI.  After each class, we ask him to come share his learning with the rest of us, because, as I have mentioned, it our mission to Make Places Better.  

His most recent class was about energy efficiency.  I thought it was all going to be about the benefits of installing an energy management system, which I know is important, but which is also not always possible to do.  Instead, what I discovered was that many ways to improve efficiency have to do with basic maintenance and smarts about how to operate the property.  

Take air filter changes for example.  We are 99% there because we contract with a company who assesses and installs the right filter for the right unit for the right environment.  On top of that, however, changing the intake filters on all the HVAC compressors is something only our Building Engineers or HVAC service technicians know how to do, and it should be done at least annually.  

We also discussed how one of our Engineers manages to seriously minimize certain HVAC costs for his property, not by cutting needed maintenance or service, but by being a smart about how he buys supplies for his equipment.  As a group we decided to adapt his strategy at all our properties.  Don't hesitate to contact me if you'd like to hear more about what that is.

Insurance and Risk, two sides of ten coins

Since some of our properties are owned by partnerships we control, several years ago we huddled with our insurance agent and combined all of the insurance policies for those properties into a single "master policy" that renews annually on March 1.  A couple of years in we started offering our third party clients the opportunity to add their property or properties to the portfolio.  Working through the renewal process, though, is always an education in the arcania of insurance terminology.   Wind and hail deductibles, all other perils, terrorism, and "umbrella" liability, are all terms you seem to need a PhD to understand. This year we got the opportunity to learn about buying flood insurance when there's a property actually in a FEMA flood plain.  Fun stuff, I'm telling you.  We get that when you own a property, you have to understand these things. With our ability to cover a portfolio, we have perks we would never have with an individual policy, such as the ability to have--yet another arcane term--"blanket" coverage and the ability to cover vacant properties at reasonable costs.  This year we're celebrating the fact that our premium didn't go up over last year, which is under $.20 per square foot for most of our office properties.  Given that we live in tornado alley, that's an accomplishment, and worth the brain damage, maybe even worth that PhD.