There are several reasons you might find yourself considering whether to hire a property management firm to manage your shopping center.

Perhaps you’re a new investor with little, if any, time to oversee a property?

Maybe you inherited property or portfolio of properties and need real estate experience to support your efforts?

Or it could be that you’ve self-managed your properties and grown tired of the relentless responsibilities.

Whatever the case, the decision to hire a property management company to handle your retail property should be weighed carefully. You’re contemplating placing a third party in charge of an extremely valuable asset. And the management company’s administration of this asset could have potentially enormous financial and legal ramifications for you personally.

That’s why it’s best to outline the pros and cons of such a decision.

Now, as a professional retail property management company, we’re certainly aware of the benefits our services provide. But we’ve also seen the situation from the other side of the coin. With nearly 300 properties under management, we’ve spoken with more than our fair share of landlords. And we’ve discussed at length the concerns landlords struggle with the decision to turn over their properties to an outsider.

This experience, however, has granted us the advantage of perspective. So, if you’re thinking about hiring a property management firm to care for your property, here are the pros and cons you should consider:

THE PROS OF HIRING A PROPERTY MANAGEMENT COMPANY

Saves You Time

If you’re like many retail strip center owners, your plate is already overflowing. You have a fulltime job. You own your own business. You’re overwhelmed caring for your family. Or perhaps you’re engaged with all of the above. Bottom line, there isn’t much time left over.

Meanwhile, servicing a retail shopping center is a HUGE time commitment. Overseeing tenants and vendors. Staying on top of maintenance. Collecting rent and paying invoices, mortgages, property taxes and the like. The responsibilities literally NEVER end.

But a property management company handles all of these responsibilities for you. Your property manager interfaces with tenants and supervises vendors. They monitor maintenance and ensure your property remains in peak physical condition. And the management company handles all property financials. The accounting department collects and records rent and CAM payments. And pays and tracks all invoices, mortgages, tax bills, and other payables.

Saves You Money

What’s a fair price for trash removal, sweeping or power washing? What if your parking lot needs a new slurry coat or complete replacement? Or your roof springs a leak? Or your HVAC system gives up the ghost? What’s a reasonable price for those projects?

As a landlord, you probably have no idea. And it would take TONS of leg work just to gather bids and establish a fair market price, let alone negotiate the services. And in the meantime, the issue is lingering. Which is either consternating your tenants, creating a hazard the could spell an enormous legal liability for you or both.

A property management firm, however, deals with these sorts of issues on a daily basis. A property manager can quickly secure bids, recommend your best option, and initiate the work in short order.

Increases Your Property’s Profitability

A well-maintained center is certain to attract customers. A well-patronize center is far more likely to host productive tenants that remain in place for an extended period of time, thanks to their consistent consumer draw. And a center fully leased to successful tenants is the key to maximizing your property’s profit potential.

A property management firm diligently monitors your center’s physical condition, oversees maintenance, and holds vendors accountable. The results of which ensures your property is appealing to your tenant’s customers, and in turn, keeps your tenants happy. And that means you can rest assured your property is achieving its peak profit potential.

Avoids Legal + Financial Non-Compliance Issues

There are no shortage of laws governing your property. And failure to comply with any of these myriad legally binding rules and regulations could spell fines, lawsuits, and other financially disastrous outcomes.

Additionally, federal, state, and local governments are working hard to ferreting out revenue. Any miscues in handling financial documentation, income reporting, or tax filings could result in massive fines, penalties, and worse.

With a property management company handling your property, you don’t have to worry about any of these issues. Your property manager will keep you appraised for legal statues and other legislative changes that impact your property. And help you navigate the process should such laws require modifications to your shopping center. This includes ADA compliance, which has been an enormous financial thorn in the side of scores of retail property owners.

Additionally, a property management firm’s accounting departments logs, tracks, and fully documents every aspect of your property’s financials. These efforts yield the most complete financial record you could hope for. And at year-end, you can simply turn over your general ledger to your CPA!

Minimizes Your Tenant-Related Headaches

Tenants are demanding and relentless. And their constant barrage can be irritating and emotionally draining. Additionally, it can be awkward and uncomfortable to play the role of the “bad guy” in turning down a tenant’s request or enforcing the terms of their lease.

A property manager, however, acts as a buffer. All tenant communications funnel through your manager. And your manager will exercise a “firm but fair hand” in imposing your will.

Enhances Your Property’s Investment Value

A fully leased, well-maintained, financially stable shopping center populated with successful tenants represents an incredibly valuable asset.

And the services a professional property management firm provides is your best opportunity to achieve this status with your retail property.

THE CONS OF HIRING A PROPERTY MANAGEMENT COMPANY

Property Management (Might) Cost Your Money

If your property is not leased on NNN leases agreements, you must pay a monthly management fee.

**As a brief aside… CBM’s leasing expertise can also assist with converting current tenants to NNN leases. For more info on CBM leasing, visit our website leasing services page: cbm1.com/services

Additionally, if your property is on NNN lease agreements, but there’s a vacancy, you may have to make up the portion of the management fee not covered by the missing tenant.

If your property is fully leased on NNN leases, however, your management fee is bill back to your tenants as part of your NNN charges.

You Must Give Up a Measure of Control

Some landlords like to collect monthly rent. They like to pay all the bills. They like to see, personally, all the monies coming in, and all the monies going out. Some landlords like to communicate directly with tenants, to the negotiated agreement and cut their own deals. This level of direct oversight and active involvement provides these landlords the assurance that the buck stops with them.

In working with a management company, however, you must relinquish some control. You don’t see the rent checks coming in or the bills going out. Instead, you see a monthly financial statement that charts these collections and payments. And you must have a measure of faith in the management company diligently executing their duties.

Are you’re the sort of landlord that insists upon personally monitoring every aspect of your property? Are you only comfortable relying only on yourself? Is so, then professional property management is probably not for you.

How Can CBM’s Property Management Services Benefit Your Retail Property?

If the PROS outline above outweighed the CONS in your mind, you should consider hiring CBM to manage your shopping center.

For more information, visit: cbm1.com/services


Is the City of Los Angeles finally relenting to loud and persistent protests against the massive waste hauling and recycling collection fee increases instituted in 2017?

LA City’s recent announcement of fee eliminations seems to indicate a move in the right direction on a very troubling issue for commercial property owners and income property investors.

The increases, instituted midyear 2017, got a great many retail shopping center landlords hopping mad, and with good reason.

In some cases, rate increases were as high 400%. And in addition to price hikes, many property owners reported missed collections, which left their dumpsters overflowing with rancid trash.  Owners also reported being billed for waste collections that never occurred.

To quickly review, LA city government introduced the “Department of Sanitation Franchise” in 2017. This department gave exclusive domain for trash collection to seven waste hauling companies. And those companies, in turn, were assigned specific districts.

Thus, if, for example, your property is situated in District One, your ONLY trash collection option is the waste hauling company assigned to District One.

And with ZERO competition, waste hauling firms were free to jack up their rates and tack on a plethora of “extra service” fees.

But now, according to an LA Times report, a couple of these fees are being eliminated.

Following a 15-month battle between the City, waste hauling firms, and business organizations representing the interests of property owners, a “compromise” has been struck in the recent settlement deal.

The current fee eliminations include…

100 Foot Distance Fee

Under original provisions, waste haulers were allowed to charge an additional $26.68 anytime a driver had to haul a recycling bin more than 100 feet.

200 Foot Distance Fee

Also under original provisions, waste haulers were allowed to charge an additional $37.36 anytime a driver had to haul a recycling bin more than 200 feet.

Under the settlement terms, both of these fees have been eliminated.

Reimbursement

The settlement also dictates that customers who were charged “extra service” fees (on any service bill issued since February 2018) will receive a credit.

Good, But Not Great

Of course, income property owners appreciate these fee eliminations. Every little bit improves their bottom line.

But unfortunately, the settlement does nothing to address the exorbitant waste hauling rate increases. An issue that still has many property owners seething!


By Geoff Grossman
CBM Retail Specialist

Have you looked at the Southern California landscape lately? The entire region has been…

Overrun with Mixed-Use Developments!

SoCal is in the midst of a full-blown transformation. It’s happening on countless main drags. And even on many lesser traveled thoroughfares. Streets, avenues, and boulevards are bidding farewell to the low-rise multi-family dwellings and street retail shop space that once dominated this concrete jungle.

And rising up in their place? A bevy of mid-rise mixed-use developments. Multi-purpose properties featuring street retail units situated underneath apartment residences are being constructed as quickly as over-eager developers can possibly manage to erect them.

Practically speaking, the move toward mixed-use development totally makes sense…

What’s the one thing you can’t make any more of? Land. And Southern California is clearly fresh out of this non-renewable resource.

Further exacerbating this shortfall, the region is facing a catastrophic housing shortage. Which is destined to grow far, far worse before we see any indication of improvement. And this is a clear guarantee, as the Southland’s surging population growth shows no signs of waning.

In turn, the cost of the dirt alone, the real value in SoCal real property, has risen to astronomical heights. And that’s all before you factor in exorbitant design, engineering, entitlement, and construction costs.

So, how do you address land scarcity, prohibitive development costs, and strong housing demand in the face of a huge shortage?

The only option that remains: Verticality. Go UP! Hence, the current mixed-use development explosion.

The Problem – From a Retail Standpoint – With the Current Mixed-Use Development Trend

The growing mixed-use growing trend may be a practical, savvy approach to land-use in the face of challenging circumstances. The execution on the retail side of the equation, however, is falling severely short.

Scores of new mixed-use projects have risen with retail units that, in their current state, are essentially un-leasable. While other buildings have seen promising, highly sought-after tenants come and go at an astonishing speed. And these unexpected tenant departures that have left high profile vacancies in prominent locations in their wake. All because the units proved impractical for retail purposes.

Key Factors Negatively Impacting Retail Units in Mixed-Use Developments

Projects Helmed by Developers With Little to No Retail Construction Experience

The majority of recent and currently in development mixed-use projects are being handled by residential-focused developers. In other words, developers experienced in building apartments and condominiums. Not retail projects.

And it makes sense, as the majority of these projects are dedicated to residential use. But this residential focus has largely excluded any concern for the retail portion of these developments.

Architectural Design Flaws Are Limiting or Excluding Countless Retail Uses

Multi-family residential developers are fixated on their “cost per door.” As a result, mixed-use developers are intent upon maximizing residential space, while in turn minimizing overall construction costs.

This leads to architectural designs that incorporate retail space almost as an afterthought. A move which yields space that’s unsuitable for any potential tenants currently active in the marketplace.

And therefore, renders the retail portion of these new developments effectively un-leasable.

Drilling down into the problem, here are the five major architectural issues inhibiting the absorption of retail units in mixed-use developments…

Descending Rooflines

Both to maximize residential unit space and serve aesthetic design considerations, mixed-use building rooflines are descending far too close to street level. This creates very short storefronts, which seriously limits visibility for ground floor retail units, heavily obscuring shops from both auto and foot traffic.

Narrow Storefronts

In the majority of mixed-used development, frontage is limited, while depth is plentiful. Thus, to accommodate more retail units (and accommodating as many residential units as possible, which is every residential developer’s goal), most mixed-use shop is exceptionally narrow. This reduces store frontage, which, similarly to descending rooflines, significantly limits visibility to both auto and foot traffic.

Oddly + Oversized Shaped Units

As noted above, mixed-use developments face some unique spatial challenges. To maximize the use of available space, developers are inclined to make units deep and narrow.

Also, as I mentioned, narrow units, and the resulting limited store frontage are a major drawback for most retailers seeking to maximize their storefront display opportunities.

Additionally, deep units tend to yield a good deal of square footage, often in excess of 2,000 SQFT. Meanwhile, most tenants ideally suited to typical mixed-use developments – hair + nail salons, medi-spas, private fitness studios, and quick-serve restaurants – are seeking anywhere from less than 1,000 SQFT up to a maximum of 1,400 SQFT.

As a result, mixed-used developments are struggling to find tenants due to their impractical unit footprint. Or developments wind up with tenants that are forced to over-pay for excess space they simply don’t need. And these tenants often don’t stick because their profit margins don’t justify their rent.

Lack of Forethought or Planning to Accommodate Restaurants + Food-Use Tenants

Restaurant and food-service tenants have very specific mechanical requirements. Venting for cooktops, ovens and other food heating equipment is a MUST. And grease-receptors to handle the by-products of cooking and other food preparation are also a necessity.

Additionally, proper venting must (a) be constructed to code, (b) have a practical pathway to a building’s exterior, and c) not adversely impact the residential units.

Also, a portion of a grease-receptor’s apparatus must be buried underground in a specific spot relative to the unit the receptor serves and must readily accessible.

Suffice it to say, a good deal of pre-planning is required at the architectural design phase in order to properly orchestrated the infrastructure necessary to accommodate restaurant tenant.

Meanwhile, many new mixed-use developments lack all accommodations for cooking-related venting or grease receptors. And as such, these developments have completely excluded any food-use tenants that cook food onsite.

Lack of Planning for Parking Requirements

Municipalities have minimum parking requirements for retail properties based on use-type. Food-use tenants, for example, generally require more parking, as restaurant patrons tend to linger longer than customers of other retail outlets.

Mixed-use developments already include parking to accommodate residents. But developers often fail to account for the parking necessary to accommodate retail customers.

Additionally, typical parking requirements should be eased in mixed-used developments these buildings already include onsite parking. Yet many developers fail to seek preliminary waivers and other parking concessions from municipalities in the planning and construction phase.

In either case, many tenants are denied operator permits because available parking does not meet the requirements for their particular use-type.

The Solution?

Based on the assessment above, the deck is heavily stacked against retail inclusion in a great many existing mixed-use developments.

Is there a way out of this mess?

The good news is: Yes! But it will require additional effort, forethought, and further capital investments on the part of mixed-use developers.

Planning For Retail in the Project Design Phase

Speaking in terms of new projects, developments should be designed with the necessary accommodations for retail units in mind from the very beginning. Proper roof lines, adequate store frontage, functional unit sizes and configurations, patio space, considerations for potential use-types (restaurants, smaller square footage users, etc…), and adequate parking allotments for retail should all be baked into original project designs.

Renovations

For existing projects, any possible renovations should be strongly considered. Adjustments to roof lines and storefronts, demising interiors to create more functional space, adding exterior patio space, excavation to install grease traps, and additional building construction to connect venting for ovens and stoves.

Alternative Uses

For developments in which renovations are impossible, developers most definitely must think outside the box to fill their retail vacancies.

This means considering tenants atypical for most mixed-use develops.
Options include:

== > CrossFit gyms, yoga schools, and other specialized personal training

== > Veterinary clinics, animal hospitals, and pet stores

== > Daycare facilities, early learning centers, private academies, and tutoring service providers

Additionally, tenant rep brokers also need to think outside the box. Brokers need to look beyond shoehorning in “typical” mixed-used tenants, the majority of which are a no-go in many existing mixed-used develops. And instead, seek alternative users that are more capable of using spaces as-is, and more likely to succeed financially in the long term.

Rent Reductions

And if all else fails? Many developers are going to have to bite the bullet and make financial concessions. This manifests as either offering rent-deductions to existing tenants or reduced rental rates on current vacancies to make these spaces more feasible for potential tenants.

The Bottom Line…

Mixed-use develops make undeniable practical sense. Moreover, such developments represent a huge economic potential for savvy investors.

But currently, this real estate segment is in an enormous state of disarray.

And unless developers take decisive action, and do so quickly, Southern California is going to wind up with a colossal glut of very expensive vacancies, and zero willing takers anywhere in site.

How Can CBM Help?

We have a collective 80 years of shopping center development, sales, leasing, and management experience under our belts. During our 30+ year tenure in the industry, we’ve leased and managed thousands and thousands of retail properties for hundreds of landlords across Southern California. And that includes more than our share of mixed-use developments.

With this sort of track record, it’s more than fair to say: We’re the retail EXPERTS!

But there’s another factor that figures into this equation. CBM was found by La Mancha Development, formerly one of Southern California’s most successful strip center development firms. La

Mancha designed, built, and sold thousands of strip centers throughout the Southern California market. Just about every 7-Eleven anchored strip center you see between Santa Barbara and San Diego was built by La Mancha.

That’s where our “80 years of collective shopping center development, sales, leasing, and management” expertise is drawn from.

So, not only do we know the retail leasing market. We know the ins and outs of what yields a successful retail development, too.

Before You Start Your Next Mixed-Use Development…

Before your team even settles in to discuss potential project designs, come to us first. We’ll present a practical perspective on what works for retail in a mixed-use property, including:

== > An overview of ideal tenants for your project

== > Functional design elements necessary to adequately accommodate those tenants

== > Required infrastructure for restaurants and other specialty tenants

== > Parking subdivisions to create dedicated retail parking in either subterranean lots, adjacent to resident parking, or separate surface retail-only parking

== > How to create a “parking plan” (that underscores reduced parking needs due to ride-share services like Uber + Lyft, rental scooters like Bird + Lime, and increased public transit use thanks to the ongoing Metrorail expansion) and approach municipalities in advance and successfully negotiate zoning modifications to ensure incoming tenants will secure use permits and meet municipal imposed parking requirements

== > And much, much more!

CBM is Your Best Resource to Develop a Successful Mixed-Use Project

Find out more about how our leasing services can benefit your next mixed-use development at: cbm1.com/services

About the Author

Geoff Grossman is retail leasing + sales agent specializing in landlord representation throughout Southern California. Mr. Grossman launched his commercial real estate career in 1999 when he joined CBM as a leasing agent. Since that time, Geoff has leased + sold thousands of retail properties, and participates in an average of 100 leasing + sales transactions annually.


The entire CBM organization gathered at Guido’s, a lux Italian restaurant on the Los Angeles’ Westside, for our annual holiday party this past Thursday.

What a scene! The team thoroughly enjoying fine dining, a few choice cocktails, and merriment galore! But the group also reflected on the value of our shared experience. And celebrated the collective that makes up CBM’s sum total.

In this review, each attendee took a moment to share a bit about themselves. Their background, what brought them to CBM, how long they’ve been with the firm, and what they’ve appreciated about their tenure here.

And amid many hilarious tales, heartfelt remembrances, and warm regards, a theme emerged. CBM isn’t just a company. Management isn’t just a gang of taskmasters. And our team aren’t just a bunch of employees. We are a family. And collectively, we continually help and support one another. Looking out, lending a hand, and lifting each other up at every turn.

So, with another year in the books, we bid a fond farewell to 2018, and look toward 2019 with great anticipation!


After nearly 30 years in the saddle with CBM, veteran property manager Dan Hirsch has decided to hang up his profession and move on to life’s next great adventure!

“I hope to do some traveling, as much as my vision permits,” said Dan, comically squinting his eyes, and adding “But I’ll be available for consulting on as-needed-basis. Though my hourly rate will be fairly steep.”

Dan’s rye comments underscored one of his most celebrated traits, his unflappable sense of humor. In addition to his humor, Dan’s always calm and collected approach has been the hallmark of his lengthy property management career.

These sentiments were echoed by several fellow CBMers who’ve been in the trenches with Dan for many years, including CFO Roger Sur, Controller, Janice Adair, and fellow property managers Pamela Ozell + Roselene White, each of whom lauded Dan’s exceptional wit and even-keeled temperament.

All of CBM wishes Dan the very best after he formally parts ways with the firm this December 31st!


It’s no secret to anyone in the commercial real estate industry that retail leasing transaction volume has slowed.

Commercial real estate reached the height of its resurgence, amid the full bloom or our “economic recovery,” roughly 18 months ago.

In the ensuing months, however, deal velocity has slowed, and fewer leases are getting done. This isn’t to say the market has ground to a halt or is anywhere near careening off a cliff. If anything, the recent down-turn is normalization. The huge upswing in leasing transactions over the past three years was unsustainable. And the recent shift is not unlike a correction in an inflated and over-valued stock market.

Key Factors Contributing to the Current Retail Leasing Decline

While “corrections” are inevitable in any market, there are three specific factors underling this latest falloff.

The Economy is BOOMING!

First and foremost, the economy is exceptionally strong. Commercial enterprises of all stripes are prospering in a financially stable environment that shows no signs of erasure. And this is particularly true among small businesses, which comprise a dominant chunk of retail strip center tenants.

Meanwhile, much of retail leasing volume hinges on turnover. In many cases… A new tenant goes in, and either their business fails before the term of the lease is up and they vacate. Or, they hang on until the end of their lease but chose not to renew because their business is ultimately unprofitable.

And this fairly consistent turnover creates a stead volume of vacancy, which in turn leads to new deals.

But given the economy’s remarkable strength currently, few strip center businesses are failing. In fact, a great many small businesses are more profitable than ever!

Inventory is Exceptionally Low

Secondly, much of the vacancy that blighted retail shopping centers in the depths of the “great recession” has been reabsorbed. This is particularly true of top-tier, A and B quality spaces (which command the steepest rents).

In essence, the aforementioned thriving economy has driven vacancies down to extraordinarily low rates. And as a result, there is simply very little desirable inventory available at the moment.

Many Landlords Are Harboring Unrealistic Rental Rate Expectations

The third factor, however, is actually the biggest culprit behind the slowing deal volume in the retail strip center segment.

And that factor is? Unrealistic expectations among strip center landlords on the rental rates their remaining vacancies are able to command.

As already noted, the vast majority of A and B quality space has been snapped up. These are your Main + Main locations, end-caps, high street visibility units, and the other highly desirable spaces.

So, what’s remaining? These are your C, D and E quality spaces. Centers a bit off the beaten path, elbow units, obstructed in-line spaces, and other less than desirable sites.

Ultimately, however, these spaces can, and should, lease as well. As the only saying goes… “Everyone (in this case, every tenant) has their price.” But the cold, hard reality is C, D and E quality spaces command lower rents. And the “price” these types of units should be offered at is markedly lower than A and B quality spaces.

Low inventory, however, has sent retail rents skyrocketing. And many strip center landlords have either been spoiled by the high dollar deals they’ve secured on A and B quality space or are pining for deals they’ve heard of other owners transacting on similar space.

Meanwhile, these landlords are being completely unrealistic about the quality of their remaining C, D and E vacancies. In short, they’re looking for A and B quality rental rates on C, D and E quality space.

The Solution?

It’s high time to gain some perspective on the quality of your product. C, D and E quality spaces are inherently flawed. Poor location, low visibility, obscure size, etc… make these units distinctly less desirable.

And less-than-desirable spaces do not command top dollar rents. It’s simply a fact. Thus, it’s time to stop comparing your C, D and E quality spaces to A and B space, be realistic about the value of

these units, and ask for reasonable rents.

Need Help Leasing A Long-Lingering Vacancy in Your Shopping Center?

Are you one of the landlord’s struggling to fill a difficult to lease space? CBM’s industry-leading leasing team is here to help! Our crew has leased PLENTY of seemingly UNLEASABLE space in our 30+ year tenure in SoCal retail real estate. And our agents know exactly what it takes to lease your vacancy.

For additional information about our leasing services or to hire a CBM leasing agent to lease your shopping center, please visit our Services page: cbm1.com/services


From the youngest to oldest, three veteran CBM team members both celebrated recent birthdays.

David Levcovitch, long-time Encino-based leasing specialist, is well into his 7th decade here on planet Earth. Meanwhile, Jeff Lerner, CBM’s IT manager, has good 40+ years of ground to cover if he ever hopes to catch up with David. And somewhere in between is Ms. Tina Flor, property manager extraordinaire (and that’s all we can reveal about her exact age ;—)

Regardless of their age gap, this fabulous trio came together and celebrated their birthdays with CBM’s entire Encino office. And we have the pix to prove it!

Congrats and happy birthday to David, Tina + Jeff — here’s to many, many more!

[Check out the happening on video here!]


In our ongoing Frequently Asked Questions series, we’ve answered…

How Much Does Property Management Cost? And  What Services Does Property Management Include?

So, what’s up next?

How Often Will a Manager Visit My Property?

Let’s start answering this question by digging into…

Why Do Property Managers Conduct Regular Site Visitations?

Monitoring Your Property’s Physical Condition

Maintaining your retail shopping center’s physical condition is imperative! This is important for several reasons…

First, you want your property looking good and in peak condition, so it’s appealing to would-be customers. Because, of course, your tenants depend upon those customers to say in business.

Secondly, you want to ensure your property is good physical condition and free from any potential hazards. This is critical to avoid any potential trip-and-fall or similar accidents that could result in personal injury lawsuits.

Foster + Maintain Positive Tenant Relations

Nurturing positive and productive tenant relations is also key to sustaining a profitable shopping center.

Your tenants are your property’s financial lifeblood. Ensuring their needs are met and concerns are satisfied is crucial to promoting their continued residency in your shopping center.

Thus, consistent access to a sympathetic ear empowered to address your tenants needs and concerns is VERY important to them. And ultimately, tenants take comfort in knowing a landlord representative FREQUENTLY visits the property they inhabit to offer that sympathetic ear.

The Best Way to Accomplish These Goals?

Have a property manager conduct regular site visits!

Site Visitation Overview

Physical Inspection

When a manager visits your property, they pay close attention to your center’s overall condition, in addition to monitoring specific details.
This includes evaluating:
== > The quality of vendor services
== > The health of landscaping
== > The condition of the parking lot, sidewalks + curbs
== > The overall appearance + integrity of the building’s structure + façade
== > And much, much more!

Tenant Relations Management

In addition to conducting physical inspections, regular site visits also afford tenants a forum to:
== > Voice concerns or issue complaints (about property or neighborhood conditions, vendor services, disputes with other tenants, or frustrations with lease terms they are struggling to satisfy)
== > Offer assessments of property vendor services (poor cleaning or trash collection may be negatively impacting their business)
== > Point out maintenance issues, mechanical or structural problems, and any potential hazards (which may be negatively impacting their business)
== > Develop a simpatico relationship with their property manager (which is often instrumental in avoiding a number of potential crises)

Now that you understand WHY managers conduct regular site visits, the question then is…

How Often Will a Manager Visit My Property?

Typically, managers visit individual sites once per week.

In our nearly three decades of retail property management experience, we’ve determined that weekly visits are the optimal frequency to ensure a property is consistently maintained and remains in peak physical condition.

Are there exceptions?

Of course!

More Frequent Visits

In some case, managers visit a site more frequently than once per week. Reasons for additional visits may include…
== > Persistent maintenance, cleaning or trash removal problems a manager is working to correct
== > Construction, remodeling or other special projects your manager is monitoring
== > Tenant meetings
== > Tenant move-in + move-out oversight

And these are just a few examples, many other situations may necessitate additional site visitations.

Less Frequent Visits

In other cases, managers may visit sites less often than once per week.

The most likely reason for this is when the 12th through the 15th of the particular month falls in the middle of the week. Managers are usually quite busy between the 12th and 15th of each month preparing monthly landlord financial statements and narrative reports.

Thus, a manager may not be in the position to visit every site in their portfolio.

Are Regular Site Visits to Monitor Your Shopping Center a Concern?

Professional property management would likely benefit your property.

For more information about our management services, visit our Services page at: cbm1.com/services.


Sale-Leasebacks Gain New Appeal for Retail Owner/Occupiers

By Globe St | June 25, 2018

Scott Holmes, Marcus & Millichap “Retail companies operating out of a property they own face new tax rules,” says Holmes, “and many could benefit from selling their property and leasing it back from an investor.”

CALABASAS, CA—Strategy changes for retail owner/users have become more frequently debated, says Scott M. Holmes of Marcus & Millichap, who reports that this shift in approach is largely due to changes to the tax code. This bodes particularly well for the sale-leaseback sector, as the SVP and national director of retail indicates in the firm’s Retail Spotlight.

“Investors’ desire to own stabilized assets with long-term tenants,” he says, “and the ability of owners to unlock equity for reinvestment into operations keep retail sale-leaseback transactions steady.”

This consistency in deal flow occurs against the backdrop of equally firm market fundamentals. “Encouraging single-tenant trends persisted last year,” Holmes states, “as demand for single-tenant locations held firm and rents continued their upward trend. Limited development will support the current trends through 2018, reinforcing the demand of these generally stable assets.”

Simply put, the new tax code minimizes some former benefits of ownership for companies operating from a location they own. “Previously,” says Holmes, “owner-user companies could deduct all of their interest expenses on their taxes, but the new provisions restrict the deductibility of business interest for companies with gross receipts in excess of $25 million. Now, interest totaling just 30 percent of earnings before taxes, depreciation and amortization can be deducted on taxes.” By selling the property and leasing it back from the investor, the facility cost once again becomes deductible.

Investors are focusing heavily on several single-tenant retail types, including quick-service restaurants. These assets are especially attractive, given their brand visibility and ability to resist both economic mishaps and e-commerce. “Investors also seek grocery stores, discount stores, fast casual dining, pharmacies and a range of other business types,” Holmes adds.


In a prior post, we addressed our #1 most frequently asked question: How Much Does Property Management Cost?

Which brings us to our second most frequently asked question: What Services Does Property Management Include?

This is a GREAT question! And obviously, key to any landlord’s decision when considering hiring a property management company to oversee their portfolio.
So, to answer this all-important, burning question, here are the 7 Primary Services Retail Property Management Services includes:

Accounting

At CBM, we employ a dedicated accounting department and use specialized property management-specific software to monitor and track all aspects of Accounts Payable (AP), Accounts Receivable (AR) and Common Area Maintenance Reconciliation for our entire management portfolio.

Software platform – We use a property management software platform called Skyline, which is specifically design for commercial retail properties.

Accounts Payable – Our AP services include paying, recording, and cataloging all utility bills, vendor invoices, mortgages, and property taxes. At the end of the year, just hand your CPA our General ledger to provide a complete property accounting!

Accounts Receivable – Our AR services include receiving and depositing monthly rents and Common Area Maintenance (CAM) payments. Additionally, to make these payments, most of our tenants use an automated online bill pay service (ClickPay.com) that debits funds from their bank account and transfers them directly into the property’s trust account.

Common Area Maintenance Reconciliation – Our accounting department conducts Common Area Maintenance Reconciliations, ensuring tenants on Triple Net (NNN) leases are paying their proper share of Common Area Maintenance (CAM) fees.

Site Visitation

CBM property managers visit the sites they manage on regular basis with detial reprots that include photos communicated electronically. These visitations serve several purposes:

Monitor property condition – Managers ensure the property is in good physical condition and free of any damage or hazards that may cause accidents and lead to lawsuits. Additionally, managers monitor the property as a whole, and take note of any larger issues that may require maintenance – HVAC systems, roof, building façade + structure, parking lot, sidewalks + curbs, etc…

Confirm + evaluate vendor services – Managers ensure vendors are not only performing the services for which they have been contracted, but executing those services at a high level.

Develop a rapport with tenants – Managers make themselves visible to tenants onsite, both to establish authority at the property as an agent of the landlord, and to allow tenants the opportunity to voice concerns and make complaints.

Tenant Relations Management

Managing tenant issues is a never-ending and thankless task. Tenants gripe and complain. Tenants have disputes and conflicts (with one another and landlords). And tenants ask for breaks and reductions in rent and CAM payment, often accompanied by hardship pleas (whether legitimate or not). Meanwhile, dealing with this relentless stream of demands is exhausting and often emotionally draining.

To mitigate this drudgery, property managers step in to create a buffer between landlords and tenants. Managers fields tenant requests and report all communications to landlords. Landlords are then free to make carefully considered decisions, without pressure from emotionally overwrought or manipulative tenants.

Ultimately, managers enforce lease terms, carefully balancing landlord rights and tenant concerns. In short, exercising a firm but fair hand.

Vendor Oversight

To ensure your property remains in peak physical condition, property managers closely monitor vendor services to confirm consistent and high caliber performance.

As part of site visitations, managers verify that sweeping + general cleaning, trash removal, landscaping, and other Common Area Maintenance task are being executed. And executed with careful attention to detail.

Additionally, if a vendor fails to perform a contracted service, performs inconsistently, or performs poorly, the manager will hold that vendor accountable. And if the vendor fails to improve, the manager will terminate their services and hire a replacement provider.

Finally, if a vendor’s fees increase while their level of service declines, a manager will source alternative providers, solicit bids, and make recommendations as to which alternative makes the most sense for the property.

Project Management

Over time, as a property ages, wear-and-tear is unavoidable. Eventually, building exteriors + facades, roofs, HVAC systems, parking lots, sidewalks + curbs, etc… all need to be replaced.
Obviously, this is a Herculean task that involves identifying contractors, soliciting bids, selecting a suitable vendor, and overseeing the project.

Now, a property manager is by no means a general contractor. And possesses neither the expertise nor legal authorization to act as one.

But your manager can help you…

== > Source contractors for various construction projects

== > Solicit construction bids

== > Advise you on the pros and cons of each option

== > And interface with your contractor of choice, acting as your agent in monitoring the construction process

Lease Assignments + Subleases

In many cases, tenants come and go before the term of their lease is fulfilled. It’s just the reality of the retail strip center world.

Of course, to vacate before a lease term has expired, a tenant must “assign” their lease or or sublease their space. And while not quite as difficult as executing a brand-new lease, assigning a lease is still an involved process that requires fully qualifying a replacement tenant.

Managers undertake this qualifying process, conforming prospective replacement tenant’s use-type acceptability, verifying their experience and business ownership track record, and determining their overall financial fitness. Ultimately, managers strive to ensure the replacement tenant will meet the vacating tenant’s financial responsibilities.

Lease Renewals

Whether lease options are in place or an initial lease is simply expiring, tracking and executing lease renewals is an integral part of maximizing a shopping center’s profitability.

To ensure lease options + lease renewals are handled accordingly, managers…

== > Keep landlords appraised of approaching renewal dates

== > Update landlords on tenant decisions to exercise options or vacate following lease expirations

== > Advise landlords on current market rents to negotiate competitively price renewal agreements

== > And assist landlords in negotiating financially beneficial lease agreements

And These Are Just a Few of the Core Services Property Management Provides…

For more information, visit our Property Management Services page at cbm1.com/propertymanagement