Asset Management Strategies for Commercial Properties

1. Manage Income

Asset angers manage and track income for commercial properties. They weigh how much money comes in versus expenses. For example, they track how much money is spent on managing and maintaining a property compared to rent income.

That is the only way to set a price on the lease that will make the investment worthwhile. After all, renting out and managing commercial properties can be quite expensive. Asset managers help stabilize income and minimize expenses to ensure the best return on investment.

One of the ways they do this is by forecasting income and expenses based on current data. For example, asset managers can take note of upcoming expenses and income losses, such as tenant leases ending. This lets them develop a strategy to incur expenses and supplement lost income.

2. Risk Mitigation

No business or property is without risks. However, wise asset management strategies help ensure you can minimize risks. Experienced asset managers can also devise strategies to address problems as they arise.

This can make the difference between an expensive problem and an inconvenient, albeit inexpensive problem. Commercial property asset managers need to work closely with their maintenance teams. Seasoned maintenance professionals can quickly identify risks at any given property with routine inspections.

Asset management also helps mitigate risks by ensuring organization and mindfulness. For example, great asset managers keep track of all permits, leases, and tenant information. This information is essential in scheduling maintenance and identifying risks early.

3. Preventative Maintenance

Preventative maintenance is the key to keeping a commercial property value. Countless properties lose value because of a backlog of deferred maintenance. Not only does this delay the inevitable, but it also holds your property’s potential back.

The longer a maintenance problem goes on, the worse and more expensive it becomes. Deferred maintenance can sometimes result in code violations and even lawsuits. Great asset managers know how to appoint and manage strong maintenance teams to stay on top of problems.

4. Tenant Management

Asset managers often handle tenant relations on behalf of commercial property owners. This includes fielding questions, communicating with potential tenants, vetting their backgrounds, and verifying financial information.

Asset managers can also conduct tenancy reviews, which is especially essential at properties with several tenants. This lets asset managers identify which tenants are the best investments. Such information is essential when it comes to setting rent prices and even moving on to new tenants.

5. Stabilize Your Property

Commercial property stability is among the most important duties that asset managers have. Many factors can reduce a property’s stability, such as vacancy. The longer a property is vacant, the longer you must go without income.

In that case, asset managers must develop strategies to quickly gain tenants. This can include renovations, remediation, and gaining supplemental income from your property. A strong asset management plan helps keep occupancy at 80% or higher among your commercial properties.

6. Fraud Prevention

Unfortunately, property owners often become victims of fraud. Whether it be checks bouncing or fraudulent income documents, it’s essential to avoid such problems. Luckily, experienced asset managers know how to identify red flags before fraud occurs.

Property owners can also fall victim to cybersecurity threats exposing important financial information. This can put property owners and their tenants at risk of financial crimes. Today, fortifying cybersecurity is among the most important asset management strategies.

Asset managers can also take a hands-on approach to handling payments and verifying a tenant’s financial information. That way, you won’t have to worry about tenants missing payments or misleading your management team.

7. Boosting Property Value

It’s quite common for commercial properties to become stagnant and stay at the same income level for years. That’s why many property owners specifically hire asset managers to boost property values. This often requires an investment, which an asset manager can oversee to manage the budget.

Asset managers are adept at identifying trends and mainstay renovations that typically boost property value. That way, they can ensure you only invest in renovations and upgrades that will boost income. Sometimes, this entails looking at competitors and following their example while maintaining your property’s best interest.

8. Managing Debt Structure

Many businesses and property owners incur debt early on, and that is normal. However, managing and structuring your debt is difficult while overseeing commercial properties. Asset managers can optimize debt structures to ensure it is manageable.

This can include negotiating terms and cutting costs to pay the debt off as soon as possible. Many other asset management strategies also help minimize debt. For example, an asset manager may develop new revenue streams to quickly pay off debt without incurring more debt.