Is your mall management company guilty of these all-too-common shortcomings?
Finding a qualified property management company to run your mall is sometimes little more than a walk in the dark. It’s hard to know how well your business will perform in day-to-day activities. Here are some tips we’ve developed to help shed some light on the subject.
1. There is no robust system for collecting and depositing rental payments
Surprisingly, many of the so-called professional mall management companies have never established a smooth and efficient pickup and drop-off system. That can lead to missed payments and even missed payments. This can be an emotional situation for your tenants, so be sure to only select a company that has the fully designed and foolproof payment/deposit system.
2. Poor knowledge of laws and regulations.
Shopping centers must comply with a wide variety of rules, laws and ordinances, and your property management company must know them inside and out. Make sure you know your management company’s domain of the following important legal topics:
o Signaling
o Tenant Advertising
or Upload and Download
o Air conditioning and plumbing
o Noise limits
or garbage collection
o Pest control requirements
o Store plan approvals and permits
or Emergencies
o External promotion activities
3. Improper maintenance procedures.
I would assume that a property maintenance company would be qualified to keep your property clean and in good repair. Unfortunately, while everyone talks about maintenance by lip service, many companies are woefully inadequate in execution. In our experience, this is not always simple incompetence, but is sometimes a premeditated tactic by which some companies cut corners. If they spend less time on maintenance, they increase their profits, at your expense. Ask your property manager candidates to fully disclose and explain their maintenance schedules, including the inspections they perform to ensure the work is done to your high standards.
4. Inadequate tenant retention programs
You pay a lot to insure every tenant in your facility, so maintaining them is critical to your bottom line. Make sure your mall’s property management company is trained and experienced in running programs that encourage tenants to renew their leases. This means that your managers must excel at spotting potential problems and dealing with them early. When a dispute arises, they have to be very good at resolving conflicts and providing solutions. Most importantly, they have to be good at talking and listening to tenants. They need to know which tenants need to be kept and sometimes which ones need to be let go for the overall good of the property.
A strong shopping center management company will have a strong program for regularly communicating with tenants. The program should be designed to encourage two-way conversations and to be able to identify problems while they are still manageable.
5. Not skilled at relationship building
When you find a property manager who has the ability to build and cultivate national relationships with tenants, you never want to lose them. Finding long-term anchor store tenants is critical to your long-term success, so insist on that skill of your chosen company.
By the way, relationship building skills are also important for your relationship with local tenants, contractors and vendors. Property managers who cannot communicate well with these critical resources will undoubtedly fall short of their overall performance expectations.
6. Reactive instead of proactive
Really good property managers are proactive to a fault. They stay ahead of problems, are aware of the latest information, good and bad, and are competent enough to offer good advice even before you know you need it.
Reactive managers give advice long after it has helped you. You don’t have that kind of manager on your team.
Look for systems from your management company that allow them to perform in-depth analysis of your shopping center’s performance, including current rents, lease expirations, renewal options, projected rent increases (if any), and more. Further analysis is then needed to qualify the best options to provide greater stability within the mall, such as:
o Divide the space to collect more rent
o State of ownership
o State/business climate of the areas surrounding the center
o Ability to rebuild and the feasibility of that option
o Facelift vs. complete redevelopment
o Ability to bring new tenants (and nationals)
o Keep the center updated and up to date with the market.
o Lease renewal options to help owners protect their assets
7. Inability to negotiate well.
Negotiating well is perhaps the most important skill a property manager can have. They must understand the delicate balance between representing your best interests and meeting the wishes of your tenants. Anchor tenants, of course, are known as tough negotiators, and your manager must be able to go toe to toe with them.
Without strong negotiation skills, your manager could be jeopardizing your investment in the mall and you could lose the money you invested.