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5 Financial Reports You Need to Monitor for Your Commercial Real Estate Portfolio

Your portfolio of commercial properties requires hands-on management. This includes not only your physical buildings but also your portfolio’s finances. Here’s a look at five financial reports that you need to monitor to ensure your portfolio stays healthy and profitable.

Financial Reports to review:

1. Income Statement, aka Profit & Loss Statement

Your portfolio’s income statement is a summary of each property’s cash flow. It lists all of your income and all of your expenses across your portfolio for a 10,000-foot view of the health of your portfolio. We recommend reviewing your income statement monthly or quarterly to ensure you are making the most of your properties.

2. Rent Roll

Your rent roll report provides a prediction of the amount of revenue you can expect from any given property. It includes an estimated rental value for the property, lease dates, and recurring costs as well as gross scheduled rents, renewal rates, and other rent-related figures.

3. Tenant Receivables

The tenant receivables report includes all revenue from each tenant, from rent and maintenance to utility payments and security deposits.

4. Accounts Payable

Your accounts payable report gives you a look at your obligations to vendors, lenders, and other suppliers. Your accounts payable report may include details about your loans, insurance, utilities, and maintenance costs.

5. Service Charge Budget Report

If you are planning property improvements this year, the service charge budget report will be a valuable tool for understanding how much capital you have to work with. The report includes any shared costs between tenants that will fund the refurbishment of communal areas at your property.

Clarity Commercial monitors these and other important financial reports for our clients so they can focus on growing their portfolios. For our expert property management advice and services, contact Clarity Commercial today.

 

IREM Continuing Education Classes

Fall 2023 IREM Continuing Education Classes

Clarity Commercial is a proud, active member of the Institute of Real Estate Management (IREM) Minnesota. IREM Minnesota offers continuing education for property managers who work in all real estate industries. Here’s a look at what’s coming up this fall. Be sure to check the IREM website for additional opportunities as they are scheduled. Great opportunity for your Fall 2023 IREM Continuing Education Classes.

Capstone Track | November 13

This is in preparation for the two-part final assessment for the CPM certification. The class will cover the Management Plan Skills Assessment (MPSA) and CPM Certification Exam (CPMEXM) to prepare you for both assessments.

Register today on the IREM website.

Member Party | November 30

Celebrate another successful year at IREM Minnesota! Join IREM at 4 for networking, casino games, cocktails, and appetizers. Awards and prizes start at 6:30. Sponsorships available!

Register today on the IREM website.

Clarity Commercial owner Mel Schultz, CPM, CCIM, CCAM, is an active IREM member. He is passionate about continuing education in the real estate industry. For more information about IREM and how our participation in the organization helps you, contact Clarity Commercial today.

Commercial Property Fall Cleanup Tips

Commercial Property Fall Cleanup Tips

Breathe in, breathe out . . . that’s the smell of fall! Autumn has arrived in the Twin Cities, and it’s time to schedule your fall cleanup. Here are five commercial property fall cleanup tips from the professionals at Clarity Commercial. Our crews will be taking care of these tasks for our clients over the next 60 to 90 days.

Tune Up the Furnace

While your A/C worked overtime in the summer heat, your furnace will be clocking in for its shift soon. It’s best to schedule your HVAC maintenance appointment now before your HVAC vendor’s schedule books up. Early fall is an ideal time to inspect your furnace or boiler, clean your ducts, and prepare your system for the colder months.

Confirm Snow Removal Services

For commercial property managers like Clarity Commercial, September is the month when we confirm that our properties have their snow removal services in place. While they hopefully won’t need to visit our properties for at least another month or two, it is good to have them lined up early. We partner with reputable snow removal companies to keep our clients’ parking lots clear and safe all winter long.

Make Summer Storm Damage Repairs

Did summer storms cause damage to your property’s roofing or exterior? Be sure to make repairs before the cold and snow arrive. Clarity Commercial hires professional commercial roofing and exterior contractors to inspect and repair the properties we manage. If we uncover damage, we work with our clients to have it repaired to ensure your property is protected from the elements.

Clean Out the Gutters

Gutters on commercial buildings can become blocked with leaves and other debris over the summer and into the fall. Before the snow and ice arrive, get your gutters cleaned out. A commercial roofer can inspect your gutters while they’re looking at your roof. Or, you can hire a gutter specialist to give your gutters a thorough cleanout. Work with Clarity Commercial for vetted recommendations for both.

Schedule the Year’s Final Window Cleaning

The busy season for window cleaners runs through September. It’s your last chance to get your property’s windows cleaned before it is too cold to do so safely and effectively. Clean windows let warm sunlight brighten offices and atriums all winter long, a welcome reprieve from the cold outside.

Old Man Winter is coming. Get your commercial property ready for snow and cold with a little fall cleaning. Clarity Commercial is here to help. Contact us today for help with regular commercial property maintenance.

Negotiation Tips for Landlords

Lease Renewal Negotiation Tips for Landlords

One of the most valuable services Clarity Commercial provides to its property owner clients is renewing leases with their tenants.  Lease Renewal is almost always a much less expensive alternative than seeking a replacement tenant, by avoiding gaps in income and incurring lower costs of space improvements and tenant representation commissions. Here are a few of our team’s tips for making sure your interests and property values are maximized in the process.

  1. Leverage Established Rapport with the Tenant

The lease renewal process begins the day the tenant first moves in, by the property manager establishing a personal working relationship with the actual decision-maker of the tenant, or the local head of the office.  It continues with regular contact and prompt response to issues.  The goal is to create an atmosphere where the tenant wonders why they would consider moving.

  1. Offer Longer, but Flexible, Lease Terms

Landlords prefer longer lease terms, providing steady monthly income while minimizing costs of tenant turnover.  Tenants would also prefer that structure, but potential changes in financial performance (up or down) or future business strategy call for flexibility.  A potential compromise is a longer-term lease – 6 to 10 years – with an option to terminate at a certain point in time or upon certain business events occurring.  These situations call for concessions based on the shorter lease term, with “rewards” for not exercising the termination option, or based on the full lease term with the tenant paying back unearned or unamortized concessions if the tenant elects to terminate.  For longer-term leases, consider midstream rent adjustments based on the then-current market, or increases based on metrics like the Consumer Price Index (CPI).

  1. Include Relocation Rights

It is sometimes necessary to ask a tenant to move to accommodate another tenant who wishes to expand or relocate into the space, or in the case of retail properties to optimize the location/mix of tenants to draw more customers.  Adding a relocation rights clause to your renewal lease agreement can give the landlord rights to move tenants to help you manage your property more efficiently.  These rights should include fair compensation or incentives for the potential inconvenience.

  1. Educate the Tenant on Common Area Maintenance Cost Charges

A renewing tenant will know the history of Common Area Maintenance (CAM) charges at the property.  Use the renewal process to “open the books” and talk about the historical trends in each line item, identifying those items that are non-controllable or only partially controllable.  For controllable or partially-controllable expenses, talk about efforts or processes the owner and/or property manager have implemented to control increases; or if applicable discuss unusual events that have occurred that prevented controlling increases.  This is also a good opportunity to get feedback from the tenant on the level and quality of maintenance, considered in light of the image the property is striving for with tenants and the visiting public.

  1. Review and Update Status of Tenant Improvements

One of the most common contentious issues between landlords and tenants occurs at move-out, when there can be confusion or disagreement about ownership of improvements in the tenant space – regardless of who paid for them – and whether tenant-installed improvements can or need to be removed at lease end.  Use the renewal process to walk through the space with the tenant and talk about existing improvements and each party’s understanding/expectations, as well as potential improvements needed as part of the renewal.  Make sure the renewal language clearly aligns with your discussions, which will set off the new lease term on a good note.

Commercial lease renewals do not have to be time-consuming or cumbersome. Let Clarity Commercial take care of the legwork for you. For help managing your commercial leasing, contact our team today

continuing education classess

Summer 2023 IREM Continuing Education Classes

Clarity Commercial is a proud, active member of the Institute of Real Estate Management (IREM) Minnesota. IREM Minnesota offers continuing education for property managers who work in commercial real estate. Here’s a look at what’s coming up this summer—there’s a lot on the calendar for continuity education! Be sure to check the IREM website for additional opportunities as they are scheduled.

Advancing Leaders of Minnesota Building Tour | July 27

New property managers are invited to join the Advancing Leaders of Minnesota for a building tour of the RBC Gateway and an ice cream social and happy hour. Sponsored by Davey Tree and Ben & Jerry’s, property managers under the age of 35 or with less than 10 years of experience are invited to join in the fun.

Register today on the IREM website.

Canterbury Park Tour | September 13

Enjoy an afternoon and evening at Canterbury Park and earn one hour of real estate CE. Tour the grounds and learn about building capacity and its impact on guest comfort, space use, catering, vendor relations, and horse care.

Register today on the IREM website.

Asset Management Track | September 18

The next class in the IREM Asset Management Track will take place on September 18. Join IREM for a day of learning about financing, loan analysis, investment real estate, and asset analysis.

Register today on the IREM website.

Capstone Track | November 13

This is a preparation for the two-part final assessment for the CPM certification. The class will cover the Management Plan Skills Assessment (MPSA) and CPM Certification Exam (CPMEXM) to prepare you for both assessments.

Register today on the IREM website.

Clarity Commercial owner Mel Schultz, CPM, CCIM, CCAM, is an active IREM member. He is passionate about continuing education in the commercial real estate industry. For more information about IREM and how our participation in the organization helps you, contact Clarity Commercial today.

3 Ideas on How to Retain Commercial Tenants

How to retain commercial tenants is a major concern for most commercial property owners. To do so, you must discover the things that keep current tenants happy and attract new ones. Here are three ideas on how you can keep your current tenants happy so they’re more likely to renew their lease with you.

1. Build Professional Relationships with Tenants

If rent collection is the only interaction you have with your tenants, your relationship with them is likely neutral at best. You can build your relationship with your tenants by taking time to learn about their business and their needs for their space within your building. Take their calls and give them a heads up when you need to access their space for maintenance and repairs.

You can also build your relationship with your tenants by asking them what they love about your property and what you could do to improve the tenant experience. Then, act on their advice. Investing a little in them makes it more likely that they’ll be loyal tenants for years to come.

2. Make Property Improvements

All buildings require ongoing care to operate efficiently and reliably. Retain commercial tenants by showing that you’re dedicated to keeping your property safe, functional, and attractive for them and their visitors.

Maintenance and improvements should be part of your annual budget for every one of your properties. If it’s been a few years since you’ve updated the common spaces in your office building or if the landscaping around your property is looking rundown, invest in some upgrades. Not only will this help your tenants attract new business, you’ll likely attract a few new tenants yourself.

3. Hire a Professional Property Management Company

If you’re a busy property owner managing multiple locations and dozens of tenants, partnering with a professional property management company is a necessity. Clarity Commercial can help you build and manage your tenant relationships, from finding new tenants and responding to their maintenance requests to lease renewals.

A happy tenant is a lease-paying tenant. Clarity Commercial can help you find great tenants, build professional relationships, and maintain your property to keep your tenants happy for years to come. Contact us today to discover if partnering with us would be a good fit for your property.

 

MNCAR Event

Minnesota Commercial Association of Realtors (MNCAR Event) at the Legends Golf Club

Hosted by Minnesota Commercial Association of Realtors (MNCAR) at the Legends Golf Club. The event was a great opportunity for us to network and connect with other industry professionals while enjoying a beautiful day on the course. We were able to showcase our commercial real estate services and expertise, and gain valuable insights from other real estate leaders in the region.

MNCAR Event Attendance

As a company, we’re committed to staying at the forefront of the industry and providing innovative solutions for our clients. Participating in events like this helps us stay connected to the broader community and learn about emerging trends and opportunities. We’re grateful to MNCAR for organizing such a fantastic event, and look forward to participating in future events that bring together industry leaders and innovators. If you would like to learn more about Clarity, please contact us.

IREM Property Manager

Spring 2023 IREM Property Manager Professional Development Events

Clarity Commercial is a proud, active member of the Institute of Real Estate Management (IREM) Minnesota. IREM Minnesota offers continuing education for property managers who work in commercial real estate. Here’s a look at what’s coming up this spring—there’s a lot on the calendar! Be sure to check the IREM website for additional opportunities as they are scheduled.

Feed My Starving Children Volunteer Event | April 26

Join IREM’s Advancing Leaders for an afternoon of volunteering at Feed My Starving Children in Chanhassen, then stay for a happy hour at nearby Chanhassen Brewing Company. You’ll pack meals for children in need, then have the chance to network with other property managers, including up and coming professionals.

Register today on the IREM website.

(Re)think Leadership | May 9

Reserve your spot for (Re)think Leadership: Managing Relationships in Property Management, featuring Steve Thomas. This workshop will provide strategies on working positively and successfully with your tenants, property owners, and others, especially during challenging circumstances. Facilitator Steve Thomas has helped all sorts of organizations build their teams. Qualifies for 4 hours of CE credit.

Register today on the IREM website.

Golf Tournament | June 5

Register yourself and your team for the IREM annual golf tournament at Mendakota Country Club! Join us for lunch, then spend an afternoon on the links with your team or with a new network of property management professionals. Don’t miss it!

Register today on the IREM website.

After the Smoke Clears Lunch & Learn | June 22

Scott Clemente of SERVPRO of Minnetonka will provide an hour of education about structural fire damage and how you can minimize long-term damage. Participants will witness a live burn at the end of the lunch and learn to see first-hand how quickly fire can spread and how effective sprinklers are at controlling the spread of fire. Qualifies for 1 hour of CE credit.

Register today on the IREM website.

Clarity Commercial owner Mel Schultz, CPM, CCIM, CCAM, is an active IREM member. He is passionate about continuing education in the commercial real estate industry. For more information about IREM and how our participation in the organization helps you, contact Clarity Commercial today.

Cleaners clean windows in the office

Commercial Property Spring Cleanup Tips

It may not look like spring out there yet after our record-breaking winter, but it is time to start thinking about spring cleanup. Here are five commercial property spring cleanup tips from the professionals at Clarity Commercial. Our crews will be taking care of these tasks for our clients over the next 60 days.

Tune Up HVAC Systems

While you will likely be heating your building for at least another month, schedule your HVAC maintenance appointment now. Early spring is an ideal time to inspect your furnace or boiler, clean your ducts, and prepare your air conditioning units for the warmer months.

Fill Potholes in Your Parking Lot

This winter’s severe precipitation and freeze-thaw cycles have created massive potholes on roads and parking lots. For commercial property managers like Clarity Commercial, March is the month for cold-patch asphalt and power sweepers. Now that the asphalt plants are open, our partners are able to properly fill those nasty potholes with the proper hot patch.  While the mountain of snow in your parking lot may persist until summer, you need to fill potholes and sweep your parking lot to remove salt and sand now. We partner with reputable asphalt and paving companies to keep our clients’ parking lots clear and safe.

Inspect Roofs for Damage

This winter is at least the eighth snowiest on record in the states. All that snow puts strain on your commercial roof. If you haven’t done so already, we recommend you have a professional remove the snowpack from your roof to avoid a cave-in. Once the snow has melted, have your roof inspected for damage. Clarity Commercial hires professional commercial roofing companies to perform roof inspections at the properties we manage. If we uncover damage, we work with our clients to have it repaired to keep occupants safe.

Clean Out the Gutters

Gutters on commercial buildings can become blocked with leaves and other debris over the winter. Heavy ice and snow also put strain on gutters and can cause damage. A commercial roofer can inspect your gutters while they’re looking at your roof. Or, you can hire a gutter specialist to give your gutters a thorough cleanout. Work with Clarity Commercial for vetted recommendations for both.

Schedule Window Cleaning for Late March

The busy season for window cleaners runs April through September. While there’s still snow on the ground now, we’re hopeful that by late March or Easter, it will be warm enough to give the windows on our clients’ properties a deep clean. Cleaning windows early means our buildings look their best while their neighbors are waiting for their spring refresh. Clean windows also let the warm spring sunlight to brighten offices and atriums, a welcome change from the long winter we’ve had.

Believe it or not, patio weather is right around the corner. Get your commercial property ready for sunny days with a little spring cleaning. Clarity Commercial is here to help. Contact us today for help with regular commercial property maintenance

Upgrade to Cloud-Based Access Control

Upgrade to Cloud-Based Access Control

Securing your commercial property is an ongoing concern, especially if you have tenants and their customers and other visitors coming and going from your property. Whether you own a warehouse in the north metro or an apartment building downtown, a cloud-based access control system can help you stay on top of your visitors and keep your property secure.

Cloud-Based Security Has Gone Mainstream

Cloud-based security systems are popular access control solutions for commercial properties. Cloud-based systems can integrate several different layers of security, from alarm and access control systems to security cameras and CCTV. What’s more, you can add sensors and other security equipment to a cloud-based system. If you are growing your business or are a landlord with average to high tenant turnover, cloud-based access control may be the solution you’re looking for.

In a cloud-based system, you manage who has access to your property through an online dashboard. You can assign and revoke access to all or parts of your property and review who’s coming and going. Cloud-based video storage makes it easy and affordable to keep and review footage from security cameras anytime, anywhere.

Cloud-Based Access Control for Tenant Management

If you own a property with multiple tenants, a cloud-based security system is a great option for you. Many systems operate via a smartphone app, which means you do not have to invest in hundreds of key cards that can get lost or stolen. Instead, tenants download the app, and you simply authorize your tenants as users. The app automatically unlocks doors for them via Bluetooth. Since it’s cloud-based, you can assign or revoke access instantly and monitor who enters and leaves your building in real time.

If you’re considering adding or upgrading a security system on your commercial property, Clarity Commercial is here to help. Our property managers have years of experience advising property owners on how to find the security system that keeps their property secure without breaking the bank. Contact us today for help.