What Are Your Goals For Your Shopping Center in 2020 (And Beyond)?
Not only is it a new year, but also the dawn of a brand-new decade: Welcome to 2020!
On this auspicious landmark, you surely have goals for not only the coming year, but lofty aims for the decade to follow.
And as a shopping center landlord or retail property investor, no doubt your goals land squarely on increasing the value of your property.
But how do you achieve this feat?
There are 4 key benchmarks retail property owners needs to consider…
- Increasing efficiencies
- Lowering vendor fees
- Capital improvements
- Raising revenue
To aid in reaching your goals, here are a bevy of tools and strategies to help increase the value of your property in 2020:
An efficiently functioning property holds far greater income-earning potential. And in turn, is an infinitely more valuable asset.
The good news here is, there are more tools available to increase efficiency now than ever before.
Let’s take a closer look…
What was the biggest buzzword in commercial property management in 2019? PropTech!
What exactly does ProTech mean?
Basically, it’s fancy jargon for the convergence of real estate and technology. These days, there are a fist full of emerging tech-tools that help you more effectively manage your property.
4 Game-Changing ProTech Tools Include…
Big Data – Gathering + monitoring data on issues like your property’s water and power consumption can help reduce consumption, making your property more efficient and lowering energy costs. Similar data gathering + monitoring on trash collection and sweeping can help you more strategically deploy these services and lower maintenance costs, while keeping your property looking better and in superior physical condition.
Geofencing – A tool that pings cell phones, Geofencing can help you build a demographic profile of area consumers. Cell geolocation data shows if consumers are visiting your shopping center or bypassing your site in favor of a nearby competitor. And this can illustrate your tenant’s performance and whether alternative uses might generate a larger consumer draw.
Site Sensors – Property sensors can monitor things like water-intrusion and other maintenance issues, which allows you to respond more quickly. Such tools can head off property maintenance issues before conditions grow out of hand, inflict lasting damage, or instigate an accident for which you could be financially liable.
Drone Inspections – Drones can be used to monitor your property in a variety of helpful ways. Possible uses might include regular inspections to confirm consistent trash collection, sweeping, and maintenance. Drones can also be used to monitor progress during construction projects.
Online Automated Rent Collections
Rent collection can be an excruciating and costly waiting game. Every month, you wait for payments to arrive. Hoping they show up on time. And if they don’t, you waste valuable time and effort chasing after delinquent funds.
In the meantime, you’re faced with the prospects of dipping into other funds to cover property expenses because you’re still waiting on delinquent rents.
The solution to avoid this torment: An online rent payment portal.
What is an Online Rent Payment Portal And How Does it Work?
An online rent payment portal is a third-party service that emails monthly billing statements to each of your tenants with a link to pay rent online.
In turn, tenants can pay from anywhere through an internet web browser. And they can make payments using ACH (direct bank transfer), a credit card, or, if necessary, via paper check mailed to the portal.
The portal then records the payment in a collection report (which they pass along to you) and deposits the fund into your bank.
No more stressing over generating monthly statements. No more postage fees for mailing those statements. No more waiting on rent payments to arrive. And no more tenants with “the check is in the mail” excuses.
Online rent payment portals streamline the entire rent collection. In turn, saving you loads of time, effort, and, most importantly, money.
Online Automated Bill Payments
Paying your property’s bills is an endless task. You’re constantly… Gathering, sorting, and recording invoices. Mailing checks (hoping payments are received and arrive in a timely manner). And tracking receipt (to avoid future duplicate payments).
Meanwhile, even a single missed payment can result in service disruptions, late fees, and possibly account cancellations.
The solution to staying on top of this ceaseless chore: An online automated bill pay service.
What is an Automated Online Bill Payment Service and How Does it Work?
An automated bill payment service is a third-party service that manages your payables process. Your vendors and service providers email their invoices directly to the bill pay service. The service codes and uploads invoices into an online database for you (or your property manager) to review and approve.
Once approved and payment authorized, the service electronically transfers funds to the service provider via their payment method of choice.
No more tracking invoices. No more cutting checks and mailing payments. And no more late fees due to payments being lost in the mail.
Much like an online rent collection portal, an online bill pay services automates your payables process – saving you time, effort, and money.
LOWERING VENDOR FEES
Over time, your vendors’ fees creep steadily higher. And all too frequently, service quality declines.
The solution to this nagging issue: Solicit bids from alternative vendors.
If you start shopping for alternative vendors, no doubt you’ll discover a pack of lower cost, higher quality vendors hungry for your business.
And if you employ a property manager, they can help facilitate the process. In fact, your manager is uniquely positioned to do so, as they deal with a variety of vendors always seeking new clientele.
Of course, the last thing you want to do is spend money on your shopping center. It’s supposed to generate revenue, right!?
But there’s a DIRECT relationship between the physical condition of your property, and its income-generating potential and overall investment value.
In other words, a property in poor physical condition – with a crack and crumbling parking lot and sidewalks, deteriorating façade, dying landscaping, leaking roof, poorly functioning HVAC, and ADA compliance issues – rarely does much business. This ultimately results in tenants vacating your property. Which in turn, squelches your income and crushes your property’s investment value.
To avoid this less than desirable outcome, here are some capital improvements you should consider:
Is your shopping center’s roof past the 20-year mark? Have you’ve already repaired multiple leaks? Things are only going to get worse – it’s time to consider a full roof replacement.
Is your shopping center’s HVAC past the 20-year mark? Have you’ve had multiple system failures requiring emergency service? The unit’s likely to die very soon. And a proactive replacement is preferable to wasting weeks making arrangements for an unexpected replacement.
Parking Lot + Sidewalk Repaving
Are your property’s parking lot, curbs, and sidewalks cracked and crumbling? They’re both an eyesore and trip-and-fall hazard that could result in a very expensive lawsuit. Make necessary repairs now and avoid bigger problems down the road.
Common Area + Building Rehab
Is your center’s building façade cracked and crumbling? Are your common areas in disrepair? This is a turn-off to customers and makes tenants more likely to leave your center. Façade repairs, fresh paint, and common area rehab go a long way toward beautifying your center and keeping tenants happy.
ADA Compliance Upgrades
If you haven’t had a CASp inspection or taken steps toward recommended ADA upgrades, you’re playing with fire.
California has made huge legislative strides toward curbing so-called “drive-by lawsuits.” But the reality is, retail landlords are still being served with ADA lawsuits every day. It certainly happens to the landlords we work for all the time. Largely, because they ignored our pleas to do a CASp Inspection and make required ADA compliance upgrades.
So, rather than play Russian Roulette with a potential ADA lawsuit, have a CASp Inspection and address any necessary upgrades ASAP.
There are plenty of opportunities to increase your property’s revenue. You just need to know where to look…
Leveraging Your Property’s Highest + Best Use
Do your current tenants represent the highest and best use for your property?
Many long-time tenants, no matter how financially stable, could be out-performed by use-type better suited to your location.
And a higher-performing use not only increases your shopping center’s income, it significantly bolsters your property’s investment value.
Resigning or Replacing Tenants on Month-To-Month + Expiring Leases
If you have tenants on either month-to-month or expiring leases, here are two questions you should consider…
Can the tenant be signed to a longer-term renewal, at a higher rental rate, with annual increases?
Can the tenant be given notice and ousted in favor of a better-qualified tenant able to pay higher rent and bring a more desirable use to your shopping center?
Signing a new lease with an existing tenant at a higher retail rate or replacing an underperforming tenant paying below-market rent are both prime revenue-increasing opportunities that will also increase the value of your property.
Collecting Your Tenants’ Triple Net Fees IN FULL
The biggest allure of a Triple Net (NNN) lease is tenants pay the bulk (if not all) of your property expenses.
For a number of reasons, however, many shopping center landlords (perhaps you included?) fail to collect in full on their tenants’ Triple Net fees.
But collecting the full measure of your tenants’ Triple Net fees both increases your property’s profit scale and makes it far more valuable to potential Investors.
Converting Your Tenants to Triple Net (NNN) Lease Agreements
Under the terms of a Triple Net Lease, your tenants pay for property taxes, insurance, and maintenance (including capital improvements).
Obviously, if your tenants are not on Triple Net Leases, you’re missing out on a HUGE chunk of revenue.
Fortunately, there’s a simple remedy. When existing tenants’ leases come up for renewal, sign them to a Triple Net Lease. And when new tenants lease space in your center, sign them to Triple Net Leases.
NEED HELP ACHIEVING YOUR GOALS FOR YOUR SHOPPING CENTER IN 2020?
What’s the key benefit of CBM’s retail shopping center management and leasing services? It boils down to one factor: Enhancing the value of your investment.
On the management side, ensuring your property is in good physical and financial condition guarantees peak investment value.
On the leasing side, a shopping center fully-leased to quality tenants is substantially more valuable to potential investors.
And this is exactly what CBM property management and leasing services provide for every property we handle.