Chapter 5: Managing Retail Properties Flashcards
Classification of Office Properties
- Grade A
- Grade B
- Grade C
Grade A Offices:
- Prestigious & prime location
- International Market
- Rental: usually high af
- In the heart of financial district
- grand lobbies
Grade B Offices
- rent is usually cheaper as facilities is not as superior
- image not as good as Grade A
- in suburbs/less prime locations
Grade C
- just provide functional space
- maintenance is ew
- shophouses etc
- sometimes no lift
What is your job?
- keep vacancy rate at minimum
- ensure building commands market rent
Management Challenge in Office buildings (what need to do what, to lead to what)
- Reduce vacancy rate
- Attract & retain tenants
- Match market rental rate
- IT & Internet revolution
- Well designed & Maintained buildings
What does SOP stand for?
Standard Operating Procedures (SOP manual).
What is a SOP manual?
- most basic and essential tool an office building manager can have
- every office property should have its own SOP
- a detailed collection of instructions pertaining to every phase of an office building’s operation
what does an sop manual tell you
what, when, how, and by whom each operation is to be performed
2 major functions of an SOP manual
- Administration
- Operation
Administration in SOP
- Organizational chart of the building
- Job description for each position
what does Organizational chart of the building do?
- shows the various members of a
building’s management team.
what does Job description for each position do?
- outline the duties and responsibilities connected with jobs .
Operation in SOP
step-by-step course of action that states exactly how a system or policy is to be carried out
4 components an sop includes
- Data about the system or function
- Physical location of any essential items
- Narrative description of the operating system
- Emergency procedures
Create an SOP manual needs:
- gather information about the building
and analyse it in order to develop a SOP for each building function. - procedures must be written in a clear and concise manner so that the management staff can understand them quickly and easily
- The procedures must be implemented into the building’s management plan
Benefits of Standardization
- permits building activities to be administrated effectively on a continuous basis
- successful management is made possible when everyone involved in operation of the building learns the policies and procedures
- ensures operation is not affected by employee absence or personnel turnover
- excellent source for orienting and training new personnel
- serves as complete guide to buildings M&E systems and equipment, is especially important in emergency situations
- increase productivity, especially if members are asked to write their own job descriptions & discover wastage of effort time/paper work
- sections that can be separated and distributed
selectively, it promotes its effectiveness as a management tool.
Tenant Manual
- Many of the procedures will be of direct concern to tenants
- who should be given a copy of those parts of the manual
- relating to such matters as after-office hour operations, reporting
maintenance problems, mail and deliveries, security procedures,
etc.
Lease Administration covers
- Supervising move-in procedures
- Maintaining tenant relations and communications
- Keeping records
- Establishing and enforcing a rent collection policy
- Move-out procedures
So what is lease administration like?
- begins when a tenant signs a lease and ends when tenant moves out of buildings
- aim to serve needs of tenants while enabling management to carry out tasks & responsibilities
- understanding tenant’s needs
- do what is necessary to meet those needs within framework of lease agreement is the job of property manager
Move-In Procedures in Office Buildings
- once lease is signed, manager must get in touch with tenant to organize the moving in
- checklist used
- may send a letter advising tenant about procedures.
Objective of Move-in letter must
- To co-ordinate the move-in
- To obtain routine tenant information - To inform the tenant of the building’s operating procedures
A sound procedure for supervising the move-in includes the following steps:
- Joint inspection of the leased premises by property manager, the tenant and
even a representative of the moving company. Any unfinished items should be recorded in a list and corrected by management prior to move-in. - On the actual date of move-in a
management representative must be present to supervise and to take note of
wear and tear caused to the building by the move-in. - For good tenant relationship: can have a catered lunch for employees of the tenants the next working day. Property manager should visit the tenant during the first day to offer routine assistance as well as moral support.
- A copy of the tenant’s manual should be handed to the tenant on the first day.
- A subsequent visit should be made to inspect leased premises for any unfinished construction items.
Tenant Relations and Communications Purpose
- reduce cost of turnover(tenant moving out)
Tenants relations program
- to create confidence in management’s goodwill & competence
- achieved through efficient response to tenant’s request & needs
Steps for good tenants relations
- appoint a maintenance contract
- establish procedures for responding to tenant requests
- logbook recording
- formal tenant feedback via survey
Keeping records
- tenant lease file
- critical data file
What is in tenant lease file?
- lease doc
- lease brief
- rent roll change instructions
- correspondence
- lease amendments
- escalation info
- key info
- alterations
- billing
- copy of ‘as built plans’
Critical data info
- remind of upcoming activity concerning a building’s tenant
Move out policies
- no matter how well-maintained a building is, tenant will vacate premises eventually.
- essential that manager anticipate moving date and name of company handling physical move
- in order to alert security guard & make necessary arrangements
- make sure all outstanding debts paid, and premise is put back in leasable condition
Rent Collection Policy
- defined as the set of procedures necessary to close the gap between the rental payment day established in the lease document and the dates
tenants actually pay their rents if no collection policy exists
rent collection need do what
- need to check client’s creditability
- supported by accounting system
how to establish a rent collection policy
- when rent is paid
- first reminder: telephone call/letter
- second reminder: warning of legal consequence
- third notice: legal action has been initiated (need lawyer)
rent collection policy should:
- Reflect existing market conditions. If the market is in a tight supply situation, a strict policy can be enforced.
- Reflect the professional image that the building ownership and management wish to project