Whats the usual property management % for small strip center?

Commercial Real Estate Investing
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Whats the usual property management % for small strip center?

Larry Rogers
Raleigh, NC · Member since 2019 · 9 posts · 5 votes

Im interested in a small strip center. Most of my properties are NNN so I manage myself, but, this one is about 150 miles away and will need a bit more management (snow removal,parking lot clean up, etc). What is the typical % fee for commercial property management? This is an 8500sf retail center with 5 tenants.

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  • Joel OwensBusiness Member
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    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    4y
    If you own single tenant NNN then why are you wanting multi-tenant retail 150 miles away?

    With a retail center you get diversification over 1 single tenant to service the mortgage plus typically maybe 1 to 2% more cash on cash from the going in down payment.

    8.500 sq ft is small. Typically management is about 4% of gross collected annual revenue and sometimes 5%. You have to check leases and make sure no cam leakage where you have cam stops on management above a certain percent that you can't pass on to the tenants etc.
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  • John M.
    Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
    4y

    Larry


    You sound like me. I own some Stnl properties but want to branch out Into mtnl properties. Hit me up if you want to discuss. I would contact other small strips in that area to see who they are using to manage the property.  If it’s in Fayetville I might have a contact. 

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  • Tyler Derickson
    Investor · Fort Wayne, IN · Member since 2017 · 25 posts · 4 votes
    4y

    Larry, I have a few office and retail strip properties in a different state, but I'm currently paying 4% (of gross income) for buildings larger than 25k square feet and 5% for the smaller buildings. They also place a minimum per month rate of $500/mo regardless of income/property size to make sure the property is worth their efforts, so in your case the rate may be significantly higher than the quoted 5% if management companies in your area are similar. 

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    4y

    Depending on your turnover and condition of the physical property, I'd see up to 6% plus a percentage of repairs.

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