Whether they are office, industrial, multifamily or retail, all commercial buildings have at least one thing in common. Without good property management, efficiency falters, occupant comfort declines and in the end, revenue plummets.
For the more than 150 industry professionals who attended the 15th Annual Chicagoland Asset, Property, Facility Management Conference, there were plenty of best practices and other takeaways for how to optimize the tenant experience and keep buildings occupied.
The first panel, moderated by Jaime Zwierzynski, sales account manager at Rex Electric, focused on the state of the market. Panelists included Andy Bartucci, senior vice president commercial management at Foresite Realty; Helen Karlos, vice president property management at Zeller Realty Group; Don Stewart, senior vice president at Inland Commercial Real Estate Services and Ken Verne, senior vice president, asset management at Bridge Development Partners.
Property management has evolved and one thing that has become far more important than in decades past is an emphasis on amenities.
“Tenants want everything that they have at home in the office,” said Karlos. “And employers want them to be comfortable, so they offer things like various food options or breakout rooms so they can work in different places. The trend is toward more of a hospitality feel so it doesn’t feel like a traditional office.”
Bartucci pointed out that some of those amenities have to be thoughtfully implemented. He has seen instances where a fitness center is placed too close to office and residential tenants. Without good soundproofing, these can cause noise complaints. But investors can be even more boisterous with their complaints.
“Our clients are very demanding, always pushing us to work harder for them,” said Bartucci, speaking of the biggest challenge he faces daily. “It can be frustrating trying to satisfy clients who might have unrealistic expectations.”
The panel briefly discussed spending money and time to make spaces more sustainable, and whether or not tenants respond to those efforts. For Stewart, who focuses on retail real estate, there hasn’t been overwhelming support.
“There are lots of buzz words that all sounds fantastic, but when you’re managing open air shopping centers, things like car chargers don’t make money and are more of a marketing tool,” Stewart said. “It’s a larger outlay for the owner to put those in and the tradeoff is you get branding and a bullet point on your community initiative.”
Another hot button topic that the panel debated was the effect that marijuana legalization will have on real estate assets and those who manage them. In terms of usage by individual tenants, it will likely be regulated just as tobacco is currently. It remains to be seen if community pushback will hold up retail and industrial leases for those selling and/or growing marijuana. One thing to consider, as Verne pointed out, is funding.
“The biggest challenge is whether or not your equity sources are okay with it,” said Verne. “One of our main equity sources is a teachers’ fund and they may not be okay with it. I don’t know yet how accepting the industry will be.”
The second panel focused on the everyday strategies of those in the trenches of property management. Jim Hochman, partner at Schain Banks, moderated the discussion and joining him were Jenn Allen, energy efficiency program lead for ComEd; Bryan Barus, CCIM, CPM, managing broker at Suburban Real Estate Services; Elena Jimenez, property manager at The Missner Group; Terry Ramsett, founder and CEO of Foodbarz and Dan Szatkowski, director of market development at F.E. Moran Fire Protection.
When dealing with vendors, property managers often encounter issues such as a company not having documented certificates of insurance. To lessen the amount of time they spend dealing with these headaches, many managers will outsource.
“Instead of my staff dealing with vendors sending in wrong documents, we go to a third party,” said Barus. “It reduces the opportunity for fraud as well as the number of times we have to chase somebody down. That works well for us.”
Jimenez agreed, saying that her firm outsources invoicing so that they can paperlessly and efficiently bill their vendors. “Another thing that is so important is having a strong contract with your vendors,” she said. “It should say what the completion date is and if they don’t meet that, how you’ll negotiate for a credit for their not meeting the deadline.”
While the first panel exhibited some reticence toward sustainability, Allen pointed out that green building measures like a well-tuned HVAC system do more than lower bills. They help the property manager be proactive against volatile weather events and employers like that employees perform better when a space’s occupant comfort and lighting are optimized.
“This year and last year we raised the incentive quite a bit and we can now cover up to 75 percent of a project,” Allen said. “I know it seems counter-intuitive for a utility to offer all this money, but its more cost effective for us to invest in your efficiencies than in a new power plant.”