Choosing what hands to put your most valuable asset into is a tough decision, especially when so many options exist.
More often than not, the larger commercial property management organisations seem the obvious choice simply because of their size.
However, we’re here to tell you why bigger isn’t always better.
Who’s managing your account?
Often, you’ll have initial discussions with prominent directors who understand the industry and can make big promises. However, once the contract has been signed, you’ll likely be passed over to a new property manager.
Ideally, this handover process will be smooth, but considering some portfolio sizes, one minor miss-step can lead to large financial consequences.
There’s also the likelihood that this handover process won’t be a one-off occasion. As a general rule, the bigger the organisation, the higher the turnover which is true with property managers. And the more handovers (as in changes in property manager), the higher the risk that errors are made.
Boutique commercial property managers aren’t so confined to their roles. If you meet with a director, they will likely become your property manager. No hassle-filled handover necessary, which means the information you impart on your property manager has a higher chance of being retained.
Experience
These bigger property management organisations attract staff that are new to the industry, meaning they have more broad range of experience amongst their staff. While for the less experienced property managers, this is an ideal training ground, they’re ultimately practising or “cutting there teeth” on your investment.
We’re seeing more and more the importance of maintaining strong relationships with tenants, contractors and agents alike and these relationships are only formed with tenure in the industry.
With economic uncertainty still hovering uncomfortably close, tenant vacancies have become more frequent and expensive than ever. This means fostering positive relationships with tenants to encourage longevity must be prioritised. However, for more junior property managers, this can prove to be a challenge as it requires a high level of management and engagement that they are new to.
Boutique commercial property management companies often get their start in these bigger, more corporate organisations and get a good amount of experience under their belt. The hard lessons have already been learnt, giving them a more diverse range of experience.
Adaptability
As we all know, the world is changing, and it’s changing fast. Changes in technology or legislation have put a high demand on commercial property managers to be agile.
However, adapting to change in larger organisations can often be slow. It first requires multiple layers of organisations to get on board, then work out how to adapt processes and procedures to suit, and then get everyone onboard with the new processes before implementing any kind of change to their operations.
This will most notably create problems with the possibility of commercial property managers requiring licensing or regulating in the near future. For bigger organisations, this potentially will cause major disruptions to their operations and take them longer to get all of their commercial property managers properly trained and certified according to new regulations.
These challenges with change are less strenuous for boutique commercial property management companies. Their size allows for more flexibility in their processes, making adapting to changes much easier.
Just as well, by not being impeded by strict processes, these property managers are also better at efficient problem-solving.
Pricing
Azure recently brought to light the issue of pricing that exists within the industry.
Most commercial property management organisations’ pricing structure is based on an archaic model that doesn’t offer any transparency to investors on where or how their management fees are being spent.
In late 2022, Azure introduced a fixed pricing structure that allows investors to see exactly what they’re paying for in a way they’ve been previously denied.
As we pointed out earlier in this blog, larger organisations take much longer to implement change, so their investor clients will likely not see change to their pricing any time soon.
Go boutique
While bigger commercial property management organisations are maybe better at making things look shiny, the delivery isn’t always as glamorous.
The team at Azure has decades of experience, including working in these larger companies. Working within a smaller them, we have brought together our unique experiences to deliver high-quality service with an unmatched level of flexibility and focus.