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.   

Starting January 1, it's an "Open" and shut case

Here in Texas, carrying a concealed handgun if you are licensed has been legal for some time.  This year, the state legislature also ruled that those same license holders could carry handguns openly. There are rules about holsters, etc., but basically, unless there are specific signs prohibiting it, here in Texas you may be seeing a lot more guns in January.

In our shop, we wondered if we should maybe get to know a bit more about this, maybe try and help our clients to decide for their own buildings whether they should take a position on the subject.

So we sent someone to a BOMA seminar on the subject, checked with our insurance agent, and then debated among ourselves to come up with something of a white paper on the subject.  I'm in the process of sending that out to our clients now.

So many questions arise:  Should handguns be banned?  What is the owner's liability?  What is the Property Manager's liability?  Can each tenant do something different?

Easy answers are hard to find.  The conclusion we finally arrived at was that employees and visitors to an office property should not have to have the expectation that they will encounter someone carrying a weapon openly.  Given that concealed carry is also legal, we decided to recommend to our clients the middle way of banning openly carried guns, but not install the signage banning handguns that would be concealed.  Let me know if you would like to read the full white paper.

September is about more than Football - I know, who's listening?

We property managers like football as well as anyone, I guess.  Since September is also National Preparedness Month, we are obsessing about more than football, we're talking safety.  We obsess because a safe building is also a comfortable place to be, and we love making our tenants comfortable and our clients are happy keeping their tenants.  Everyone wins!!

So I thought I would pass along the BOMA's (Building Owners and Managers Association) "Top Ten" tips we property managers will be reviewing in our huddles this month.

http://www.facilitiesnet.com/emergencypreparedness/article/BOMA-Preparedness-Top-Ten-List-for-National-Preparedness-Month-Facilities-Management-Emergency-Preparedness-News--11160

With hurricane season in full swing and experts predicting an increase in cases of the H1N1 virus this fall, now is the time to revisit preparedness plans, according to the Building Owners and Managers Association (BOMA) International.

September is National Preparedness Month and BOMA has released a list of ten best practices property professionals can adopt to ensure their tenants, staff and buildings are safe in an emergency or natural disaster.

An effective preparedness plan includes an emergency response plan, a communications strategy and a blueprint for business continuity.

Here is a list of tips to help property professionals start planning now:

   1. Review your plan. Regularly go over your building’s emergency preparedness plan with your team to ensure everyone is familiar with all aspects of emergency protocol.
   2. Practice makes perfect. Have your preparedness team take part in tabletop exercises, in which team members walk through various emergency scenarios and propose responses to “what if” questions.
   3. Involve your tenants. Make certain all of your tenants are aware of the building evacuation procedures and encourage them to participate in evacuation drills.
   4. Communicate. Develop a multi-layered crisis communication plan that is fast and effective in reaching tenants, local authorities and agencies, and the media.
   5. Stay alert. Sign up for daily alerts to monitor weather conditions and cases of pandemic influenza in your area.
   6. Work with authorities. Review local evacuation procedures and identify the agency that will issue evacuation orders.
   7. Cross-train staff. Identify and provide cross-training essential personnel to provide critical services.
   8. Revisit HR policies. Determine how your company’s leave and salary policies will apply in emergency situations, such as a pandemic flu outbreak, when a significant portion of your workforce may be unable to come to work.
   9. Operate remotely. Consider identifying off-site work facilities or telecommuting capabilities to ensure business continuity in the event of a disaster.
  10. Find the latest resources, such as informational websites.