Competition for Class A trophy office space is heating up in many markets, and Tampa, Florida is no exception. With properties vying to secure leases with best-in-class top-tier renters, property managers are pushing owners to create the most attractive buildings possible. However, some owners are more challenging about spending money, despite their goals to drive rents and increase occupancy. For these clients, it’s the property manager’s job to make them realize that in order to make money, you sometimes have to spend money.
How Property Managers and Brokers Benefit from Partnerships
One of the best things I have learned as a property manager is that when there’s a challenge in getting budget items like upgrades or new amenities approved, teaming up with a leasing broker can be a good idea. A leasing broker can help the owner to understand expenses because the broker is seen as the one who is generating direct revenue. Even when a broker and property manager work for different companies, they have a mutual goal of leasing up the building with a good roster of residents.
A broker and a property manager look at a building differently, and a broker can help a property manager to understand how the building shows to prospective renters. Residents talk to each other. If a building has operational issues, it’s going to get out to the market and potentially hurt the ability to lease-up the building.
Property managers should do consistent walk-throughs with their brokers, who can point out what a property manager might miss like common areas that are dirty, the minute details such as loose door handles, and amenities that aren’t up to par. Brokers and property managers should also consider vacant spaces. Should a space be left as a shell? Be somewhat built-out and ready for move-in? What are the needs of the market? At the very least, they should be clean and free from construction or building materials. Together, they can approach an owner and make a recommendation that makes the space more attractive.
What Happens When Managers and Brokers Work Together
Brokers and property managers who don’t work together can cause real problems for the building owner. For example, a broker might set unrealistic expectations about the move-in timeline to secure a new resident. A property manager will know how long it will take for the space to be ready, so they must work together or else its possible that the start date might get pushed back, leading to an unhappy renter that’s barely into their lease.
Brokers can also help property managers brainstorm creative marketing and retention initiatives that won’t break the bank for the owner. Conversely, if the budget for these initiatives is too small, the broker can help persuade the owner to provide the capital for these items.
For large office buildings, property managers begin working on budgets over the summer and brokers should be an integral part of the discussion. It’s important to know what’s going on in the market and communicate the most up-to-date information. For example, construction costs can fluctuate, and resident improvement costs can rise from $30 PSF to $40 PSF on a year-over-year basis, which will impact your budget.
A broker will also have insider knowledge on what competing buildings are doing and investing in to stay top-of-mind. If a property down the street is investing millions in the renovation of their common areas, a property manager might want to budget in upgrades that would make their common areas comparable. While it’s easy for an owner to say no to a broker or a property manager, it’s harder when they come together as a team.
Each member of a building’s team from security to the engineers to the property manager to the leasing broker plays a critical role in the success of how the building is perceived in the market and how it’s run – all of which drives value for the owner.
Written by Julie Palmer-Nicholson, Director of Commercial Property Management at Franklin Street.
Julie Palmer-Nicholson serves as Director of Commercial Property Management for Franklin Street’s Office and Industrial Services division. With more than 20 years in the commercial real estate industry, Ms. Palmer-Nicholson is responsible for overseeing new business development, client relations, and operations for Franklin Street’s office and industrial assets in the Tampa Bay market.