Innovation is Driving Commercial Real Estate Recovery, Report Says


The demand, rent and lease rates for commercial real estate are closely linked ‌with ‌the economy. In order to be successful, commercial property management companies must successfully lower operating costs for property owners while maintaining high levels of tenant satisfaction, according to a new First Research report on the industry.

Cities with innovative industries and skilled talent pools are expected to thrive in commercial real estate growth, the report stated. JLL’s Innovation Geographies report found that U.S. cities are leading the growth, which is happening sooner than expected during the pandemic. The pandemic has highlighted the importance of high-tech services, life sciences, high value-add manufacturing and scientific R&D.

The report also found that property management companies are increasingly using technology to help them monitor commercial leases and manage services.


Marketing to build clientele for CRE property management companies

Typical customers for commercial real estate (CRE) property management companies are businesses that own or lease space in properties such as office buildings, retail areas, shopping centers, warehouses and industrial buildings.

Relationships and referrals can play a vital role in securing commercial property management contracts.‌ ‌Many property management companies develop relationships with real estate investors or brokers.‌ ‌In addition to personal referrals, companies may advertise in trade magazines and use Internet databases to attract clients.

Fees paid to property managers depend on the level of service provided and the amount of space managed.‌ ‌Contracts with property management companies may include payment incentives based on operating expenses, gross income, occupancy levels and tenant satisfaction.‌ ‌The contracts are typically for one to three years, but they can‌ ‌be‌ ‌usually canceled‌ ‌after‌ ‌a‌ ‌short notice‌ ‌period,‌ ‌usually‌ ‌30‌ ‌to‌ ‌120‌ ‌days.


CRE property management solution key to keeping track of myriad information

Commercial property managers may deal with large amounts of cash and can have high monthly cash flow. Office, industrial and retail leases typically last five to 10 years. Securing prompt payment is crucial; for U.S. commercial real estate managers, accounts receivable average more than 70 days’ sales.

Commercial property occupancy rates, rents and the schedule of lease renewals are factors that can determine the size and stability of revenue, because property management fees may be based on a percentage of rent collected. Demand for commercial real estate is closely tied to the economy, as a challenging business environment translates to lower occupancy levels in office buildings, retail outlets and industrial space. Factors such as employment growth, interest rate levels, and the availability of credit can directly impact demand for commercial property management.

Commercial real estate management companies must adhere to tenant rights guaranteed by law, as well as building standards relating to structural support, roofing, plumbing, electrical, and environmental concerns. Requirements and regulations vary by state. The industry offers certification programs and credentials through organizations such as the Institute of Real Estate Management (IREM).

Keeping track of all of the data points and rules and regulations required is daunting under the best of circumstances. That’s where state-of-the art CRE property management solutions can help.


Property management software is imperative

Now more than ever, in today’s challenging real estate industry, it has never been more crucial to have all aspects of your operations to running at optimal efficiency. You need the ability

to make decisions proactively and based on solid information. One thing becomes crystal clear – using the latest technology and property management software is mandatory.

Working with the right technology partner

Anton Systems implements end-to-end solutions for businesses, with expertise spanning commercial, residential and retail property management and real estate development.

One of the product offerings specifically designed for this industry is Budgetrac software. Budgetrac is a dynamic, powerful lease management system that allows commercial property managers to capture, track and fully evaluate their metrics on historic, present and future data, increasing productivity and profitability while keeping everything in one easy-to-use system.

Budgetrac is the only software specifically designed for the real estate developer and property manager available in the market today. Property management and development is a complex business and you need a solution that simplifies the process yet comprehensive enough to address all aspects of your operations.

For more information about Anton Systems or a demonstration of Budgetrac software, please Contact Us!

Share this post