Property Management Success: Winning the Competition for Clients
Property management a fast-growing commercial real estate specialty. By the end of this decade, the size of the market will reach nearly $99 billion, according to Mordor Intelligence. At the same time, the level of competition is arguably increasing amid the office market’s challenges and shrinking development pipeline for the office and industrial sectors.
This challenges property managers in all asset classes to not only continuously be at the top of their game, but to add value for clients in such areas as net operating income and foot traffic. It’s crucial for service companies that want to break away from the competition and build relationships with owners and tenants.
Wanted: versatility
Whether it’s floor plates at a trophy office tower or a grocery-anchored retail center, owners and tenants prefer property management firms capable of offering an individualized touch at their properties. A smaller firm focused on a particular market that may have established relationships with local residents, business and government officials may be a better fit than a national service firm company.
Ben Mandell, CEO of Tricera Capital, which launched a property management arm in August 2023, advocates for this approach, seeing a “core infrastructure” consisting of “boots on the ground” that constantly listen and adapt to the space-specific needs of tenants and owners.
In Mandell’s view, a local operation also gives tenants more individualized attention in the South Florida markets where his firm is active. “You can provide an institutional–(level) product with a boutique touch, and we have separated ourselves by doing that,” he said.
This can mean anything from curating on-site events with local businesses, to making sure that a tenant’s ground floor retail space isn’t obstructed by a bench and bus stop enclosure. And Tricera has direct experience with the latter issue at a property in Miami’s Wynwood neighborhood. “It hindered their visibility and obstructed their traffic, and we used our relationships with the city to have (them) removed, which eased visibility,” Mandell said. “It’s a little bit above and beyond in our relationships, which are very regionally focused.”
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Alongside a preference for a more local, nimble approach, some stakeholders also like to get all of their ancillary services in one place. “Experienced, one-stop commercial real estate services providers those that offer full operational, construction management and leasing capabilities in-house have a distinct advantage when it comes to winning new business,” said Erika Morasco, vice president of property management at Levin Management, which serves retail properties in the Northeast and Mid-Atlantic.
In practice, that requires some property managers, for example in retail, to take on a development role. In Morasco’s experience, this is because tenants “are looking for a turnkey delivery of space, which, simply put, is having us fully build out the store.”
Having in-house construction expertise is “paramount” for property managers to set themselves apart in a place where owners may otherwise hire multiple firms, leading to a more costly and time-consuming operation.
From this perspective, the best partners are those that can improve a property before they are brought on to manage it. “Façade improvements freshen up a space and make it more attractive to prospective tenants,” Morasco said. “In the past, this is something we may not have done until a tenant was signed to the space.”
Adding tangible and intangible value
Besides bringing local expertise and wearing multiple hats, property managers can set themselves apart. The ability to save owners and tenants money is a sure winner. “We look at where there may be opportunity to save, and then we go and provide the quote,” Mandell reported. “You (can) give them intel and knowledge that they would not have otherwise.”
But what about repetitious, day-to-day tasks? The traditional communication skills associated with property management are often what tenants use to associate services with brands. “Most firms will offer similar versions of the same types of services,” noted Adam Parritz, director at Glenstar. “But someone is actually responsible for sending out those emails and planning those events.”
For event planning, a smaller, nimbler operation is often better able to curate experiences that make sense for specific occupiers, rather than provide blanket appeal to an entire building. Parritz recommends that approach, not only to cultivate long-lasting relationships, but to make the company’s services a reason to stay in a space long-term.
“All of our capabilities and all of our services that we provide are directly related to a tenant’s experience at the asset, and the likelihood that they are going to renew or expand their space,” Parritz said.
That mindset applies to the curation of the spaces. In life science markets as saturated as some of those on the West Coast, it’s often one of the deciding factors for owners in selecting a property management partner.
And at those facilities, it’s often not so much the appearance of the lab space, but what’s offered outside of it. “Our property managers recognize that their role goes beyond providing great lab buildings,” pointed out Tracy Perrelle, senior vice president of West Coast operations at BioMed Realty. “They know (that) they must foster work environments that meet and exceed client expectations with curated amenity programs and events that encourage innovation and the exchange of ideas.”
Additionally, technology is becoming even more of a game-changer, with real-time monitoring applications such as Placer.ai giving operators “crucial insights into market trends and consumer patterns,” according to Morasco. All-in-one financial dashboards and integrated work order platforms also ease up tenants’ clerical experiences. These tools are comparable to the preference for all-in-one offerings of project and property management services.
Get the word out
Of course, the best, most responsive services mean nothing if one’s prospects don’t know about them. Trade shows, industry events, web and email marketing all have a place, but for service companies, the best form of advertising is a good reputation.
As such, happy tenants are likely to sell a company’s services more effectively than any brochure could. “Word-of-mouth referrals have always been, and will continue to be, the best and most gratifying introduction to new business prospects,” Morasco advised.
That positive feedback can be at least as valuable to property managers as upward-trending web analytics.
“If it comes from that type of source where they are happy and referring us, it’s because the service was of a certain class,” Mandell noted. “(It’s) giving live examples of what we have done for clients and getting in touch with the owners to give that to them directly.”
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