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GETTING A HEAD START
ON BUDGET SEASON:
PROPERTY INSPECTIONS, MAINTENANCE AND PROJECT BIDDING FOR COMMERCIAL PROPERTIES
by Tim Blackwell
The kids are back in school and fall is around the corner . . . which means the commercial property budget season is officially upon us.
Preparing a solid operating budget for your commercial properties is a critical part of successful operations. Well-planned budgets
allow property managers to assess controllable operating expenses and analyze revenues while working to increase their properties’ NOI, keep tenants happy and attract new ones.
While there are many components to preparing a good commercial property budget, in this blog we’re going to share a few helpful tips to prepare for the budgeting process, including property inspections, tenant surveys, ownership discussions, and creating RFPs for bidding on both standard maintenance projects and capital expenses. These pre-budget activities will support your strategic and financial plans so they make sense in the context of the bigger picture of NOI and asset value.
Here are four helpful activities that may better prepare you for budget season and assist in successful property operations.
FORMAL COMMERCIAL PROPERTY INSPECTION
It goes without saying that you need a comprehensive checklist in order to carry out a proper inspection of your assets. While speaking with maintenance teams and tenants about any problems and doing regular visual inspections are valuable, failure to complete a thorough property inspection with a comprehensive checklist can often lead to unplanned expenses that don’t make it into your budget. It is important to do a thorough inspection of all building areas and mechanical items that seem to be working perfectly fine in addition to those that have known issues. Doing a complete property inspection with a guided property inspection checklist will not only allow you to budget for immediate needs, but can also be helpful in budgeting for 5-year capital expense items such as parking lot repaving, bathroom updates, common area paint projects and many more.
While the checklist can differ depending on the type of commercial building you’re managing (retail shopping centers, office buildings, industrial parks, mixed-use, etc.), many elements of a checklist can remain consistent amongst property types including:
• Roof
APARTMENT MANAGEMENT MAGAZINE - NOVEMBER 2021 CS-23