Working in commercial real estate can be tough, even dismal and dreary at times. Looking at pictures of precious baby animals is not. You have to juggle dealing with disconnected vendors, angry tenants, frustrated maintenance staff, and ornery engineers - and you don't always hear what you want to. Inspired by postcards from "Grandma's Dead: Breaking Bad News with Baby Animals," we've decided to soften some of the difficult situations that arise in commercial real estate by blasting your eyes with cuteness.
Operations have long been a determining factor in maintaining and increasing asset value. But to keep up with the changing CRE industry, organizations who strive to be the best should be asking themselves, ‘what practices exemplify ‘best-in-class’ operations for commercial real estate assets?’
By emulating the operational practices of market leaders, CRE teams can position their properties for above-market occupancy and rent. This will lead to higher income and greater asset value. Here are a few real, tangible actions from high performing properties that CRE owners and managers can use as examples to improve the competitive performance of their own properties:
Operate with a proactive outlook.
Management teams at high performing CRE properties report spending more of their time being proactive than their peers do. This means that high performing teams set up processes and use technology to spot problems before they impact tenant satisfaction or create even bigger problems. Ideally, these processes and technologies can assist in preventing these unexpected fires from starting in the first place. A proactive approach can free up time for CRE teams to create value through operations rather than just trying to maintain value by being reactive about emergencies. To learn more about the ways technology can help you be proactive, read our recent blog.
Choose the right amenities thoughtfully.
Contrary to what some CRE professionals think, amenities don’t always offer the value-driving differentiation that asset owners seek. In fact, the value of certain amenities depends solely on the type of asset. Trophy assets have the name recognition to draw tenants, so the kinds of amenities they offer may not be as impactful as they originally thought. Class B and C buildings don’t always have the option to attract tenants with amenities due to lack of budget. But among Class A properties (a hyper-competitive market), an investment in the right amenities sets best-in-class apart from their peers. To maximize the differentiating possibilities of amenities, building teams should be thoughtful, creative, and informed when selecting which ones they offer. Remember to choose the right amenities, not all the amenities. To get more insight on which amenities tenants actually want, check out the Tenant Experience Gap Report.
Maintain a hospitality-like mindset because it is key to keeping tenants happy.
Tenants are as crucial to the success of a CRE building as are customers staying at a hotel. Like customers in the hospitality industry are a priority for hotel managers, tenant satisfaction is top-of-mind for all commercial real estate professionals. But keeping tenants happy today requires new and different efforts from property management teams. Responsive service and studious relationship management are now prerequisites, not differentiators. It would be wise for CRE teams to take note of those in the hospitality industry to keep their customers (tenants) happy and renewing. To gain a better understanding of how to do this, check out a recent blog, “CRE Needs a B2C Mindset.” At the end of the day, the most important factor driving asset value is happy tenants, and happy tenants lead to renewed leases and maximum occupancy rates.
Leverage technology effectively and be interested in tech innovation.
The majority of commercial properties have commercial real estate technology in place to facilitate basic jobs like maintenance notifications, task tracking, and documentation. But having technology in place is only half the battle. To realize true value from technology, property management teams must optimize it by aligning their processes to the tech they are using. Additionally, as tech continues to flood the industry, CRE teams must seek out innovative, open solutions so they can look at end-to-end operations across their entire asset and portfolio. This means having a holistic view or a simple flow of information from accounting all the way through operations and the tenant experience.
CRE is in the midst of an operations revolution with market forces adding new pressures to building management teams. It’s not as simple as acquiring an asset in a prime location to be considered a high performing CRE property or a building people want to work in. Understanding and emulating the practices from best in class CRE buildings can help every property drive more value from its operations.
Get five more tips for improving operations in this helpful eBook:
Thinking about ditching outdated processes and technology? Interested in becoming a high performing property? Get in touch with us.