Real Estate Management: Everything you should know
Contents
Complete real estate management of properties is a full-service approach to real estate. Like everything else, because of the pandemic, the industry has experienced a lot of change and upheaval in the past two years. Read on as we tackle the basics about the real estate management industry and address the evolving world of property management.
Property Management Basics
Investopedia, a leading financial website, has written extensively on this subject, including a piece entitled, “Property Management.” The piece, authored by the Investopedia team, reviewed by Somer Anderson and fact checked by Ariel Courage, defines property management in the following way: “Property management is the daily oversight of residential, commercial, or industrial real estate by a third-party contractor.
Generally, property managers take responsibility for day-to-day repairs and ongoing maintenance, security, and upkeep of properties. They usually work for the owners of investment properties such as apartment and condominium complexes, private home communities, shopping centers, and industrial parks.”
When it comes to what’s involved with responsibilities of property managers, according to Investopedia, “Their main roles are to manage routine tasks delegated to them by the owners and to preserve the value of the properties they manage while generating income.”
Management Roles Revealed
To elaborate further on the last point about responsibilities of property managers, it is important to note there is a lot involved when it comes to overseeing property management.
Rocket Mortgage published a helpful piece on its website, written by Sidney Richardson, entitled, “A Guide: What Does a Property Manager Do?” According to Richardson’s post, , “The main purpose of hiring a property manager or management company is to protect your real estate investment and passive income. Investors hire property managers to manage their rental properties for a variety of reasons, from wanting a local professional to handle a property to a desire to take a more hands off approach with their properties.”
Richardson goes on to list a few of the common responsibilities involved in real estate management that we are sharing with you below:
- Acts As A Local Presence For Out-Of-Town Owners
- Handles Maintenance Requests
- Shows And Leases Vacant Units
- Collects And Deposits Rent
CRE Explained
The Runstad Department of Real Estate in the College of Built Environments at the University of Washington defines CRE this way:“Corporate real estate is the real property used by a company for its own operational purposes. It provides corporations with a productive environment to house employees, manufacture and distribute products, and provide services to the market. Corporate real estate touches all classes of property, land and buildings such as office facilities, data centers, manufacturing facilities, logistic centers, corporate headquarters, distribution facilities, retail stores and hotels. Historically, corporate real estate professionals focused on managing the physical property for the business. They were charged with acquiring, maintaining, and disposing of real estate throughout the “lifecycle,” or useful life, of any property.”
Changing Times
As you have likely gathered, the world of real estate management has undergone tremendous change because of the COVID-19 pandemic. The effects of the pandemic certainly are widespread and will have lasting implications for years to come. For more detailed information on how COVID-19 has impacted CRE, HubStar authored an informative post entitled, “COVID Lessons Learned for Corporate Real Estate in order to Thrive.”
CBRE, a commercial real estate services and investment firm, also addressed the affect of the pandemic on CRE as part of a larger piece, “The Transformation of Corporate Real Estate in the Age of COVID-19. CBRE writes that, “Health, safety, and environment now shares top billing with cost savings as leading priorities informing the CRE mission.”
CBRE continues by sharing some important data and research to reiterate how health and safety are now paramount: “Pre-COVID-19, CRE leaders most commonly reported enabling the core business (68%) and delivering quality service on time and budget (62%) as core to their mission. In the COVID-19-era, the top two missions of CRE leaders are ensuring the health and safety of employees in the work environment (71%) and identifying/driving cost savings (71%).”
The National Law Review published an insightful article to provide a better understanding of the changes that the pandemic has left in the CRE world. According to the article, written by Tim Little and Scott Vetri, both partners in the real estate practice at the law firm Katten Muchin, Rosenman LLP, “It’s been a whirlwind 20 months for commercial real estate (CRE), which, like so many other areas, was hit particularly hard by COVID-19.
According to a recent report, the pandemic created the worst recession the office sector has ever faced — leaving property owners to seek out new ways to entice tenants, navigate changing lease structures, and manage any number of other COVID-related issues. Moreover, COVID-19 has caused many observers to challenge and question the fundamental way we work and, more importantly, where we work. On the flip side, despite the pandemic’s persistence, other areas in CRE have proven remarkably resilient. As the economy continues to recover, PwC data shows that an enormous amount of investment is “surging into real estate.”
Little and Vetri share the following 5 trends in CRE to be mindful of, which we are sharing below:
- The rise of new lease structures: short-term, flexible and others
- Pressures mount to design a new type of office
- Climate risk and carbon emission laws will continue to impact leasing, especially during COVID-19
- Vaccination requirements pose new challenges for property managers
HubStar, is a space utilization software that helps to optimize and creative adaptive workplaces. Our technology works to enable data-driven real estate decisions providing you with proactive insights that can save you money on unnecessary leases and improve employee experiences.
