A common question that we often hear is, “does a commercial property manager also find tenants?” Unfortunately, commercial real estate agents sometimes blur the lines between the two services. But it’s actually relatively easy to understand how they are both separate and complimentary. And while sometimes two different companies may be working together on one property in these various roles, often it makes sense to have the same expert working both. So let’s briefly try to answer this question.
What’s the difference between a property manager and a leasing agent?
A commercial property manager is responsible for the ongoing management of the building and the current tenants. They ensure that the countless items required to keep a commercial property running on a monthly, quarterly, and annual basis are done—year in and year out. While holding the same license as a property manager, a commercial leasing agent focuses on marketing vacant spaces.
Are two brokers better than one?
An owner may hold the view that the more brokers involved, the better. So, while most property managers also find tenants, negotiate leases and supervise tenant improvements and move-in, sometimes an owner will hire a separate company to fill a vacant commercial space while the property manager stays in place to collect rents and service current tenants, as well as take care of ongoing property maintenance. This may be because the owner does not have confidence in their manager to find tenants or because sometimes the property manager may not offer that service at all.
Who will do the best job?
However, as often as not, owners task their property managers with finding new tenants for vacancies as they come up. And that makes sense. The property manager is the person who has the “boots on the ground” knowledge of the property. Moreover, they’ve likely spent more time at the property than anyone else. And so, it follows that a good property manager should know more about the property than even the owner. But knowledge of the property, while essential, isn’t enough.
In order to fill a vacancy, a property management company also has to have agents with market knowledge. They need to be able to position the property to be competitive with the other commercial buildings available, and so they need to know what is leasing and for how much. In addition, a commercial leasing agent needs to understand how the property they represent will compare when a prospective tenant is touring several properties at a time. A property manager with these additional skills is qualified to also find tenants.
What are the costs?
Whether an owner uses their property manager to find a new tenant or an outside broker, we have to remember these are two different services, and each get paid separately. Property management is an ongoing monthly cost that pays for the management of the landscaping, the janitorial, paying the utilities, answering tenant concerns, and all of the dozens of items a property manager has to keep track of regularly. Still, it doesn’t include the cost of finding tenants. Finding a tenant is a separate one-time irregular event. And that has a separate one-time leasing fee associated with it.
At McBride and Ceballos, we are commercial property experts. Among our other services, we do manage properties for our clients and fill vacancies. We help our owners manage their ongoing maintenance and rent collection obligations and locate great tenants when the need arises. Check out our reviews, and then ask us for help.