Property Manager

Commercial Property Management

1738 views September 1, 2017 September 25, 2017 Justin Stowe 5

Finding the right commercial property management company is one of the most important things you can do for your business. Because you are entrusting so much to one person (or group of people,) you need to make sure you’re hiring the best.

The problem is that every company you talk to will tell you they’re the best.

So how do you decide for yourself? Well it will take some leg work, but here are a few of the main points to consider. First let’s talk about what to expect from your PM.

What Services do Commercial Property Management Companies Offer?

Every company is different, but there are a few key areas where the PM should help you. In general, the company should do the following:

  • Build a comprehensive budget for the property and maintain the bookkeeping for it.
  • Document procedures in accordance with the law. This is to help them avoid doing something illegal and gives you insight on how they do their job.
  • Manage tenant marketing (if vacant), leases and renewals. This includes everything from the contract paperwork to evicting tenants not paying the rent.
  • Create a market rent analysis regularly to understand how much other buildings in your area charge to help you stay competitive.
  • Track and deliver key performance indicators of the property including vacancy, rent, and the local area’s economic growth.

There’s actually a lot more to it, as this great article from mentions. But this is a good start and gives you a basic idea on what to expect.

Is the Commercial Property Management Company Even in Your Area?

If you are looking for someone to manage properties in Atlanta, would a property manager that currently only works with Chicago buildings be a good choice?

Or if you are in upstate New York with a small commercial building, does it make sense to have someone from downstate by NYC who normally handles skyscrapers manage your building?

Probably not.

This doesn’t necessarily mean the company you hire has to be based out of your city. The CBRE Group manages 1.2 billion square feet of property. They are based out of Los Angeles, but have offices across the United States.

The point is that any company you’re considering should at least have some kind of presence or experience in your area. That not only makes it easier for you to work with them, but they will be able to better manage the property’s daily activities like maintenance.

Commercial Property Management Certifications

Even though certifications and education aren’t necessarily a strong indicator of performance, they at least show how much exposure and dedication the person has to the industry. In this case, you should look for someone who is an ACoM – Accredited Commercial Manager.

This should be the bare minimum, because an ACoM only needs one year of experience to get the cert. They have to do other things as well, such as complete classes and take a test, but the point is it that a commercial building manager with some experience under their belt should be able to become an ACoM.

Something else to consider isn’t as much of a certification as it is a specific type of experience. Right now sustainability is a huge buzzword in the real estate world. The problem is getting a LEED certification for your property is difficult. However, companies can pursue getting certified as an IREM Certified Sustainable Property. This isn’t easy, but hiring a commercial property management company that has helped do this in the past isn’t a bad idea.

Why does sustainability matter? For one thing, it will save on your overhead costs and tenants’ utility bills. Customers of all kinds are starting to prefer businesses making sustainability efforts, so that’s something you (and your tenants) can promote.

How Big is the Commercial Property Management Company?

How many people are on the team? Would it just be one property manager, or do they have a team of several to back them up?

These are important questions to ask because you don’t want your management to be just one deep. In those kinds of situations, there are a number of things that may go wrong:

  • They get sick
  • They quit
  • They’re not very good
  • They’re overwhelmed and unresponsive

That’s why you want to look for a company that you know is large enough to accommodate your needs. That doesn’t mean they need a huge support team, but having some kind of backup is important.

How Much Experience Do They Have?

  • How many properties do they manage?
  • Are some similar to yours in both function and size?
  • How long have they been operating those types of properties?
  • How do they find new tenants for commercial buildings?
  • What are their procedures for when a tenant is late on rent?

These are just a few things to consider. We’re actually putting together a list of questions to ask a property manager, so stay tuned for more information on that.

This is similar to the certifications arena, but here you are diving deeper into exactly what kind of commercial property experience they have.

Managing a strip mall is different than managing a fifteen story office building. Working with an industrial complex isn’t exactly the same as managing a group of restaurants.

No, you may not find the commercial property manager has worked with the exact same type of building you own. But at least being familiar with it, or having someone else on their team to help them, is a great start.

Something else to keep in mind – most states require property managers to also have some kind of real estate license. This means they may have been in a real estate agent or broker before getting into commercial property management. That’s actually a good thing, as someone who has some experience under their belt there may understand the market better than someone who has always been in property management.

Do You Like the Company?

This is another big thing we like to emphasize here at RentPost.

Your property manager is your representative. Everything they say or do may as well have come from you, because that’s how the tenants see it.

Keep that in mind when you start looking around and interviewing different companies to find the right fit. If someone from the company- whether it’s the office manager, property manager or CEO – doesn’t treat you well, how do you think they’re going to treat your tenants?

And when your tenants aren’t happy and start to complain or leave, it’s too late.

How Much Should You Pay a Commercial Property Manager?

In both residential and commercial arenas, the typical fee is between 5 – 10% of the monthly rent. To some people, that sounds like a lot. But as this article from references,

Keep in mind that you get what you pay for. If a company advertises extremely low fees, stay away! The only way they can offer such a discounted price is they will not allocate enough resources to properly manage the building. Maintenance won’t be performed timely or well, tenants won’t be happy, and you may end up in a worse position than if you had just managed it yourself!

Taking a cut off the monthly rent isn’t the only way PMs get paid. Sometimes they’ll tack on other fees, such as filling a vacant spot in the building or renewing an existing tenant.

As you interview each company, ask them about their payment structure.


If you invest the time and energy in finding the right commercial property manager at the beginning, you’ll save yourself a lot of heartache later on. It’s not easy, but it’s well worth it in the long run.


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