Five Reasons to Secure Professional Management for a Troubled Asset
As the economy continues its uneven recovery, many financial institutions and their legal support teams find themselves controlling troubled real estate assets. Managing a failing condo project or dying strip mall back to appropriate levels of operational efficiency and financial accountability is a complex challenge. It requires a significant investment of time and a high degree of expertise in all aspects of property management.
Under the best circumstances, maximizing the value of a troubled real estate asset — no matter the size — is difficult. When explosive emotions and technical complications arise, even a few wrong moves can be disastrous. Consider these five ways a professional property management firm guides you to the best possible outcome:
Limit Financial Liability:
The key to a positive outcome in virtually all of these situations rests in the ability to first stabilize the asset before beginning the turnaround. Empty storefronts, unhappy tenants, code violations and deferred maintenance can expose ownership to significant financial liability. A seasoned real estate manager quickly identifies potential problems and begins solving them efficiently and effectively.
Protect Your Downside:
Floods, fires, vandalism and other life safety issues are just a few of the unfortunate incidents that have the potential for serious consequences to a troubled real estate asset. Liability and loss potential can be staggering. An experienced real estate manager reduces the likelihood of “Murphy’s Law” striking and, if it does, acts quickly to limit the damage.
Service Tenants and Ownership:
Poor customer service and uninvolved ownership are common characteristics of a slumping asset. Left unaddressed, these issues can accelerate the slide. A professional property management company relies on its platform, systems and experience to work with tenants, meet their needs and keep them happy. Leveraging its numerous vendor relationships, a property manager develops more competitive contracts for a variety of services — both restorative and operational — that lead to valuable cost controls.
Rehabilitate Relationships With Local Stakeholders:
Municipal officials, nearby business owners and local residents often become disillusioned and lose trust when a real estate asset begins to falter. Support and understanding from these key players are critical in guiding an asset back to viability. A professional manager presents a credible, experienced new face to help bolster and establish relationships that can make or break a project.
Maximize Value And Develop A Long-Term Strategy:
Everyone’s ultimate goal is to maximize value and ROI. A long-term strategy achieves this through targeted investments and increased occupancy. A professional management company, involved in the turnaround as early as possible, provides expert analysis and direction in the development of a plan that significantly increases an asset’s value over a specific time period.
David Behnke, CPM is president of Siegel-Gallagher Management Company. Contact him at firstname.lastname@example.org.