2021 Commercial Property Management Predictions

It is finally time to put 2020 behind us and take a look ahead to 2021. While the pandemic will have an impact on the commercial property management industry in 2021, experts predict COVID-19 will have several positive effects on property management next year.

The Property Management Experience Will become More Digitized

After surveying commercial real estate professionals across the country, the experts at Deloitte believe the rapid transformation from in-person to digital property management will continue into 2021. Management companies will continue to increasingly offer prospective tenants property tours online and provide an online leasing experience. Online communication with current tenants is likely here to stay, too, as rent collection and tenant requests are all managed via email and web applications.

Property Management Companies Will Rely More on Tenant Data

As the tenant experience moves online, property management companies will have more opportunities to collect and use tenant data to improve the tenant experience and increase portfolio revenue. Tenant data can give property managers a clear and accurate look at the books and provide crucial insights into what the future holds. Tracking data related to tenant requests and building use can help you better understand your tenants and meet their needs.

Tenant Footprints May Shrink . . . or Expand

According to the experts at PWC, the rapid transition to a remote workforce has caused many tenants to rethink their space needs. So too has the adoption of curbside service for many retail, restaurant, and medical tenants. In some cases, tenants may cut back on their square footage, eliminating office space or public areas. But others may do the opposite, expanding their footprints to accommodate social distanced collaboration. Property managers should be prepared to be flexible negotiating space in 2021.

Safety Upgrades Will Remain a Top Concern

The personal safety of tenants and guests will remain a top concern in 2021. Property managers will continue to improve building safety and hygiene with robust disinfection processes and updates to high-touch services. Others will upgrade HVAC systems to improve air circulation or install touchless technologies, such as automated lighting, doors, and AV controls.

Clarity Commercial looks forward to serving property owners in 2021 and beyond. To work with a professional property management team based in the Twin Cities, contact Clarity Commercial today.

Choosing an Onsite Property Manager

Selecting an onsite manager for your commercial property is one of the most important decisions you’ll make as a property owner. Your onsite manager is your boots on the ground, point of contact for your tenants, and record keeper for your property’s agreements, insurance policies, and accounting records.

Your onsite manager should work well with you and your commercial property management company. Often, Clarity Commercial will find, hire, and manage onsite managers for the property owners we partner with. Here is what we expect our onsite managers to do and what we look for in an onsite manager.

Your Boots on the Ground at Your Property

Your onsite manager is responsible for the daily upkeep of your property. They should walk your property to make sure public areas are clean and safe. Things they should take note of include overflowing garbage cans, slick walkways, burnt-out lightbulbs, and sticky key mechanisms in doors.  While they may not perform maintenance and repairs themselves, the onsite manager should work with your landscaping service, cleaning company, and maintenance crew to ensure jobs are completed quickly and thoroughly. An effective onsite manager has an eye for detail and is able to coordinate one or more maintenance crews.

Tenants’ First Point of Contact

In addition to serving the physical property, your onsite manager is the first point of contact for your tenants. They answer the phones at the management office and are the first point of contact for tenant requests. Your onsite manager may also be responsible for keeping tenants current with rent and enforcing property policies. An effective onsite manager is approachable, friendly, and comfortable asking tenants to pay rent or comply with your property’s rules.

Review and Maintain Property Records

Lastly, your onsite manager must be organized and familiar with your property’s records. At the management office, they will maintain accounting records, tenant files, and your property management agreement as well as your property’s insurance policy. While they may not have all of these documents committed to memory, they should be knowledgeable about your property’s policies and know where to look for an answer when asked a question about a lease agreement, rental payment, or insurance claim. An effective onsite manager is well-organized and knowledgeable.

These are just a few of the things Clarity Commercial looks for when hiring an onsite manager. We can help you find and manage your next manager so you can focus on growing your property portfolio. Contact the Clarity team to get started on your onsite manager search

2021 Renovations & Improvements to Consider

As the economy and Twin Cities real estate market continue to be affected by the prolonged effects of the pandemic, many property owners are thinking of creative ways to attract tenants to their buildings. While some have put 2021 building renovations on hold, there are several improvements property owners can make to help them retain current tenants and attract new ones.

COVID-19 Health and Safety Renovations

The smartest improvements you can make to your commercial properties are those that assure tenants your building is safe to occupy during the pandemic. A very affordable option is to simply advise tenants on how to configure their spaces to accommodate social distancing. Help them rearrange desk space or use your buying power with your vendors to offer low-cost sanitizing and personal protective equipment to your tenants.

You may also make long-term improvements to your building’s HVAC system and communal areas. Consider updating your air distribution system to improve indoor air quality and remove contaminants. In common areas, consider replacing soft furniture with hard surfaces that can be wiped down and disinfected frequently. You may wish to replace your current countertops with antimicrobial options now on the market. Motion-sensor lighting, automatic doors, and cloud-based controls for the AV in shared conference rooms can also keep your tenants safe. All of these improvements are selling points for potential new tenants.

Sustainability Improvements

While health and safety improvements meet an urgent demand, renovating your commercial buildings to be more sustainable will help you attract tenants and save money in the long run. Improving the energy efficiency of your building lowers your heating and cooling costs, keeps building occupants more comfortable, and is a major selling point for green-minded tenants.

Upgrading your building’s HVAC system not only improves air quality, it can save you money in the long-run. Efficient systems are more cost-effective to run and reduce your heating and cooling bill. So can energy-efficient windows and doors that help stabilize your building’s temperature, keeping it cooler in summer and warmer in winter. Updating your lighting to efficient LED bulbs can save you money in maintenance and electricity bills. Plus, the costs of upgrading lighting can be spread out over several years if you tackle one area of your building at a time.

It’s more important than ever to attract and maintain good tenants. Building renovations and improvements are a solid strategy for keeping your building competitive in the leasing market. For more tips on how to attract tenants, contact the Clarity Commercial team today.

Building a Realistic Budget Projection for Your Commercial Properties

A Note on COVID-19

The Clarity Commercial team is watching the COVID-19 pandemic closely and is following all guidelines from the CDC and the State of Minnesota. Our team is stepping up hand hygiene and practicing social distancing to help slow down the spread of the virus and ensure we are healthy and able to serve you and your properties through the pandemic.

You have a portfolio of properties, but do you have a sense of the income you generate from these properties over the course of a month or a year? How about your expenses? If an unforeseen expense pops up at your property, can your budget handle it? A budget projection answers all of these questions and helps you maintain a healthy and successful commercial property portfolio.

How Budget Projections Help You Manage Your Commercial Properties

Creating a budget projection for your portfolio of properties will help you work toward your financial goals. Most property owners have a sense of the revenue their properties bring in as well as the monthly cost to manage those properties. A budget projection puts concrete numbers to every income stream and expense over a 12-month period. Not only does this give you a more accurate understanding of the health of your portfolio, it provides milestones for you to hit as you work toward your financial goals.

Budget projections help you anticipate and mitigate problems that may arise later in the year. You can use the data from current and past months to manage loss of income or extra expenses down the road. Your budget projection may help you identify the best time to complete a building improvement or step up your marketing.

Use a Current Year or Rolling 12-Month Budget Projection

Budget projections should cover a 12-month period. Some property owners choose to project over a calendar or fiscal year (January to December or July to June, for example), while others choose to use a rolling 12-month model. Use your leasing calendar to decide which model will work best for you. Whatever model you choose, update the data monthly so you have a clear idea of the health of your portfolio and your projections stay accurate and realistic.

Include a Cash Forecast

A cash forecast is one element of a budget projection. Rather than income, a cash forecast projects your portfolio’s cash flow. Cash forecasts are extremely helpful in budgeting for maintenance, improvements, and unforeseen expenses. Some property owners break down cash forecasts weekly rather than monthly for an accurate look at cash flow for a particular month.

Consider Adding a 3- to 5-Year Outlook

While budget projections are most useful if they look at 12-month period, it can be helpful to use your budget projections to forecast a three- to five-year outlook. While you can’t predict the future, you can take an educated guess at your portfolio’s outlook based on past performance, market trends, and the strength of the economy. Thinking three to five years ahead can help you plan strategically and develop long-term financial goals for your portfolio.

Budget projections are an essential part of managing a successful commercial property portfolio. Clarity Commercial can help you put together a projection that helps you understand your revenue streams, expenses, and make a plan for future growth.

For help creating a budget projection for your portfolio, contact Clarity Commercial today.