I'm wondering what to do with some commercial real estate that I have co-inherited from my dad. It's been neglected and mis-managed to be honest. None of us are real estate professionals (my dad is a doctor). We have three multi-tenant retail/service shopping centers worth about $14 million with about 150,000 sf building area and 35 suites (some of which are vacant), and then three single tenant buildings that are leased up that are a passive investment and don't take any work. I'm wanting a mostly hands off role in these shopping centers. I need to get a broker first of all, but I'm possibly wanting to get a property manager. I don't know if they would have enough to do to really keep themselves busy, or if there would really just be a lot of work until we get everything caught up, and then there wouldn't be much left to do. We already have an accountant that handles the billing and whatnot. Would you hire a full time property manager? Would you try to find them locally? Or would you use an established local property management company? I worry that an established company would have so many clients, that we would hardly be their priority. They would also probably just handle day to day stuff instead of really doing everything that goes into managing this business. I really am not very experienced or even that high functioning of a person to be in charge of all of this. We do have a class A multifamily apartment complex and I might could have our general manager take on some of the Shopping Center duties. She kicks *** and could handle some extra load too, but I don't know. Is there any rule of thumb as to how many suites/buildings normally correspond to one full time commercial property manager? Any advice appreciated!!!!
At least short term I'd go with a PM company, you don't know what you need yet, and as you learn more about what you need from a manager you can shift accordingly.
@Kevin Wheeler Welcome to BP! 14 million of anything is a pretty good haul and should provide a healthy return if properly handled. I think you need take an inventory of what you have and what your goals are. Your accountant probably has a lot more information than you might think. A property manager can provide you with the rest and between them you should be able to develop a plan to either sell the properties or how you can improve the return to make it worthwhile keeping them. Keep us posted. All the best!
Since you want to be "mostly hands off", I would find a good commercial property manager. (Note residential and commercial properties are different). Not that the same person/company can't do both but they need to understand the differences. A good property manager, will free your time and mind while still returning great financial results for you. Also, a good property manager can/will collect rents, pay bills, provide monthly financial and year end PnL statements.
As a property manager that has taken over several properties "not well managed" there is often a lot of work to be done in the first months in particular to get everything running properly and maximizing the asset.
Yes, find a well-qualified property manager that specializes in commercial. It's worth the money. Trying to manage on your own is likely to cost you far more than a property manager would ever charge.
I would begin interviewing property managers in your area. The only way to confirm your fears is to get into it and speak with people. Overall, a portfolio that size should be worth the time and effort for any good manager. Hiring a manager will make it easier to keep the portfolio performing at peak level, while also making sure that you are going about things in the easiest and most efficient way possible. And in the end, a manager allow you to be truly hands off.