Journal of Property Management

otherwise) to your owner. Many owners have chosen to postpone projects until 2010. Investors in private and public REITs are overly focused on their returns. If postponing a project is not a detriment to the property, it may be a wise decision. Ask yourself, “Can this wait?”

With Brokers

It is important to establish good working relationships with brokers to promptly pursue new tenant deals. Brokers are typically self-reliant by nature and have been known to keep details of prospects to themselves as they fear someone else might “take” their deal. On our team in my office, we have found the opposite to be true. The closer we work with the brokers on projects, the faster and more accurately the deals are completed. This benefits the brokers as they make more commissions, and benefits the manager when they receive a happier tenant and more accurate lease document. The days of working in silos (brokerage, management, etc.) are gone. A team approach is here to stay.

With Coworkers

Real estate is inherently a people business. Experts say we spend more time at work than we do with our families. A happy work environment is critical to your team’s success.

rate reductiOn

IreM professionals know from time spent in finance classes that capitalization rates are a gauge of return on investment (rOI). These rates in all forms of investment have been sliding over the past several months. Midwest midmarket office cap rates have slid from 7. 5-8.0 percent in mid-2007 to 8. 5-9.0 percent now. Industrial cap rates for multi-tenant buildings were 8.0-8.5 percent in mid-2007 and are pegged at 9.0-10.0 percent today with few buyers, fewer offers and more problems as the risk factors increase due to limited debt options. New construction has slowed significantly, due to financing constraints and increasing costs of construction that often price buildings out of the competitive market. Vacancies are on the rise too.

Hire new employees slowly and carefully, but take care of sub-par performance issues quickly. A weak link in a team brings the entire team’s performance down.

Finding a coworker on your level that you can confide in will make your team stronger. Partner a less tenured employee with a more senior member of the office to create a mentor/mentee relationship in which the junior member feels comfortable asking questions. Doing so will improve the team performance while freeing valuable time for the department managers to attend to more important matters.

Developing alternate and innovative ways to manage effectively is also an excellent way to involve newer coworkers. After years in the business, we tend to become comfortable with our routines. Be sure to listen to new or younger members of your staff for innovative ways to manage effectively. They can often amaze you with well-thought-out ideas.

A happy employee will be a well performing employee, so look for innovative ways to build loyalty, team work and happiness. Recently, my management team met at a local dinner preparation franchise ( www.socialsuppers. com or www.letsdish.com are two examples). Once at the store, we split into teams and worked together to prepare meals. Junior members were encouraged to take a senior role at this event. Completed meals were donated to the local Ronald McDonald House. The half-day event not only allowed the entire team to give back to the community, but it also allowed the team to get to know each other a little better.

re TaINING TeNaNTs

Your relationship to your tenants is also very important, especially during hard times. Retaining a tenant is far less expensive than finding a new one. Experienced colleagues have reminded me it is pennywise and pound-foolish to lose a tenant. The lease document governs the services we provide for a tenant, but we must also think outside the box from time to time. Even if the lease says the tenant is responsible to change a ceiling tile, it may be wise to change a tile or two for them. This simple gesture of goodwill may keep them from moving down the street. Vacancy is expensive. Tenant improvements are expensive. Keeping tenants happy and renewing is good practice.