Negotiating with a management company

[Yuri Roads]

HI

We are negotiating with a new commercial management company and they do things differently that others ive worked with. They charge per sqft and not a %. We like them and want to try and make this work, but wonder what sort of incentive they have to get our rents up higher. We were also thinking of trying to put a cap for the smaller units since their rate goes up as the $ amount and sqft goes down. We have had a hard time getting renters in since covid so our rents are a lot lower than we want. When there is a bounce back to commercial space and our rents go up their fees are less of a % of rent. Right now it's an average of about 6.3%.

Any suggestions on asking for a cap, how to incentivize without a % and any other related issues I should pay attention to?

Thanks so much in advance 

[Henry Clark]

Describe the properties, size units, access, etc and location better.

[Yuri Roads]

50 units from 500 sqft to 2000, on a park in a mid size city in norther ca. Mostly I want to know other downsides to commission based off sqft rather than %. Thanks 

[Henry Clark]

The work is the same whether 500 up to 2,000 sq ft so they need to charge more on the smaller units.  

You might look at dissecting your investments into managed and not managed. The ones with great tenants and remaining leases do yourself. Have you got them or move them to NNN. The others put with the management company.

[Yuri Roads]

Thanks. Interesting idea that I had not thought of.