How Property Managers Are Changing Every Asset Class

Property managers are moving into the limelight, and they are showing off just how important they are across asset classes. According to CBRE’s 2018 Global Tenant Occupier Survey, property managers play a crucial role in tenant retention and lease renewals. In the survey, 88% of tenants of office, retail and industrial assets said that the quality of the property management team had a “strong” or “very strong” impact on lease renewal decisions. In terms of what makes a quality property manager, tenants listed “responsiveness” as the most important characteristic. We sat down with Mark Butcher, CPM and managing director at CBRE, to talk about the survey and why property mangers are playing such an important role in the success of a property.

GlobeSt.com: How is property management playing an integral role in tenant retention today?

Mark Butcher: The needs of tenants and occupiers are changing, and we see more and more that they are focused on destination locations to operate their business. As a result, a lot of our clients or owners are looking to us to be the CEOs of their buildings, so to speak. We are looked upon to do more than just collecting rent today. We are the 24-7 point people and access for tenants to the functions of the buildings.

The property management role is moving more into the forefront, and we are seeing that our clients want to provide a high-level of service. Part of the definition largely accepted of a class-A asset is an onsite management office. The reason for that is connectivity and responsiveness. Responsiveness was the number one need from tenants that came out of our 2018 Global Tenant Survey. We can get no more responsiveness than being onsite and operating from the building as a manager in a management office. We are seeing more that tenants connect with our property managers and see themselves as part of the operation to provide the next level of operation.

GlobeSt.com: We hear a lot about the importance of property managers to office and retail assets, especially as experience has been valued. However, industrial is new to this list. What is the commonality between these asset classes?

Butcher: When you think about the three different asset classes, we expect to see great destination office and retail, but industrial is looked over. However, it isn’t that way anymore. We assume that there is a property manger at an office building, but you typically don’t see an onsite manger at a retail property, unless it is a big property, or at an industrial property. For industrial, in Southern California, the market is so tight that owners are trying to go out and attract the top users in the market, and in order to do that, we are seeing a transformation of industrial buildings. They are also destination properties now. They are no longer big, square buildings that sit in an industrial park. A lot of the industrial assets have increased amenities, like shared outdoor space and landscaping. We are seeing an increase in the level of service at an industrial park. A lot of our clients are pushing for amenities that we would see at a class-A office or retail center.

GlobeSt.com: What is your advice to owners looking for quality property management?

Butcher: It all starts with people. Our industry continues to move toward technology and there continues to be disruptors, in terms of property management, there are a lot of aspects of the business that are being digitized or automated—but we will never digitize the people aspect of our business. That is really core to what we do and how we service our clients. First and foremost for clients looking for a third-party manager, they need to know who they are talking to and make sure that they have the top talent managing their asset. It really starts with the people, but having a strong operating platform and having day-to-day processes and procedures are equally as important. Those are the big things that people should look for.

GlobeSt.com: How is your property management strategy evolving as the industry changes?

Butcher: We are evolving as an industry and as a company. We listen a lot to what is going on, and this survey is an example of that. We have reached out to occupiers to ask what is important in property management. I would say that CBRE as a company is trying to get out in front of the space. We certainly are listening to our clients as well as our occupiers. We are also using technology to enable experiences and services. The whole field is certainly undergoing an evolution. It has changed so much in, what I would say is, the last 20 years, and we see a lot more change coming.