Managing Commercial Property

[Trevonte Mosby]

Hello BG Team,

I hope everyone is doing well. I currently have an opportunity to manage a small commercial strip mall in Atlanta GA. I believe this would be a great opportunity to create some relationships, gain some knowledge, and build some experience in the commercial space. My only problem is that I don't know where to start! Any tips to become a great commercial property manager? 

Thanks In Advance!

[Joel Owens]

If you have no experience managing a retail center as a property manager you could make tons of mistakes and cost the owner lots of money.

Are you a licensed agent or broker? There are rules state by state for managing someone's property. There can be exceptions in some cases where you are an employee of a company and manage the assets of the company.

You would need to keep special accounting of owners bank account that is set up with reports. Small retail centers typically 4% of gross rents collected that are under 20k sq ft in size but fee structure can vary. The amount of work can depend on tenant mix of the center ( national credit, regional, large franchisee, small franchisee, mom and pop ). It's very little money in property management it's almost a money loser. 

Example if a small center collects 200k annually you are talking an 8,000 property management fee if principal broker and keep it all before your expenses.

Commercial leasing brokers tend to make more money over property management. The higher returns are in brokering properties to buy and then owning property yourself and syndicating.

Example as a principal broker if I did management make maybe 8k a year for the time invested being property manager on a center. If leasing maybe 30k at a time. If transacting can make over 100k commissions at a time. If buying a property syndicating then can make the six figure fee going in and get a piece of the pie.

If you have no experience and are licensed might want to go work at a commercial retail firm that specializes in PM work if that is what you want to do. If it is not then look for leasing or brokering transactions.

If you do not like management, leasing, or brokering and are not licensed then may want to look into working for a syndicator type company or a fund and try to get a small part of the deal as you work your way up. I have been in the business almost 2 decades. You have to start somewhere to get going.

Good luck