Attraction and comfort are vital when it comes to the success of retail or commercial office space. The success of your tenants largely depends on their ability to provide a comfortable and inviting setting for their shoppers, customers or clients for their businesses to thrive. In a sense, you are their partner in success or failure and their success will help to drive your success. Tenants are the lifeblood of an investment property. Happy and successful tenants can remain for years if not decades. Unhappy or unsuccessful tenants likely become vacancies.
To help foster the right balance between your needs as a real estate investor and your tenant’s needs, we work directly with you to achieve the following objectives:
- Balancing Expenses with Investment - An effective management plan will always work to balance Net Operating Income to its optimum level. This means knowing where money is well spent and where it is not. Although it's important to keep expenses low, it can be equally important to spend or invest money back into the property to keep it operating at an optimal level. Cut too many corners and you may find decreasing rents or attract less desirable tenants. Make over improvements and you may find the improvements did not provide the expected extra return you were hoping for. Because of these factors, Catalyst Property Management recommends having regular reviews (at least annually) with the property owners or investors of a commercial complex. This helps to ensure that we have a clear understanding of your long and short term investment objectives and that we are working to achieve them.
- Raising NOI and lowering Capitalization Rates - We understand that the market value of commercial property is tied to the relationship between the Net Operating Income and the Capitalization Rate. Almost all management objectives, except where noted otherwise, will be in the pursuit of maximizing NOI while simultaneously lowering the Cap Rate (higher NOI means better cash flow and a lower Cap Rate means a more stable property, both are factors in driving market value).
- Preparing to Sell - When it's time to sell the property, we work hand in hand with the property owner to ensure the maximum selling value. We maintain an account reporting system specifically to always be able to calculate a commercial property's value in just a few short minutes. This is true for you as the property owner, for Catalyst Property Management and for our Commercial Network of Realtors. Keeping clean and accurate books that allows for quick analysis is key in preparing the property for sale at the best price. Good and accurate accounting will instill confidence for potential buyers which naturally will increase marketability. Here is the reporting we will provide to you every month below to ensure a quick assessment of a property’s market value:
- Current Rent Roll
- Copies of any new Lease Agreement
- YTD and Monthly Profit & Loss Statements
- Current Property Tax Bill (if paid in current month)
- Current Insurance Policy (if paid in current month)
- Water Bill
- Trash Bill
- Gas Bill
- Electricity Bill
- Pest Control Bill
- Landscape Bill
- Business Permits and License Invoice or Receipt (if any)
- Ancillary Revenue Statements (if any)
- Maintenance Expense: vendor invoices, materials receipts, etc.
- Adding Value Through Repositioning - Repositioning is the process of taking an commercial property that may not be running at full efficiency for one reason or another and repositioning the property to operate at its highest potential. The level of deficiency can range from the most poorly operated and conditioned properties to complexes that may just need a couple of tweaks to obtain maximum efficiency. In any case, Catalyst Property Management has successfully repositioned several investment properties. Many of these now generate substantial more income than before the repositioning, even after accounting for the costs of management. Reposition plans can be made with an infusion of outside capital investment for a rapid reposition or can be made from within the budget from the current operations of the property. Normally, the less cash flow available for repositioning, the longer the reposition plan will take to fully execute. Either approach is fine and a budget can be built to successfully implement a reposition plan either way so long as there is sufficient cash flow.
Few companies have the commercial experience and specialization to match that of Catalyst Property Management. Each property is unique and an in depth property evaluation between property owner and Catalyst Property Management will normally result in better utilization of the property than a one size fits all approach.