Property management can yield savings

The precipitous rise in the cost of gas, oil and electricity over the last few years has fueled the need for many commercial-property owners to find ways to create greater asset values as well as to reduce facility-overhead expenses. There are several ways to save money and increase the value of your owner-occupied or leased commercial, retail or industrial buildings with professional property-management techniques.
• Lighting savings. Commercial-property owners generally are aware that significant electrical savings are available by re-lamping a building, and many already have switched first to halogen and then to compact fluorescents. Since lighting is such a big component of a building’s electricity costs, it also may make sense to install today’s more efficient ballasts and lighting sensors to turn out lights when there is no movement in certain spaces. In fact, lighting sensors now are required in all new office applications. Between rebates that often are available and the energy saved (depending on how outdated the old system is), payback can occur in as little as a year. With more up-to-date systems, we often can structure a program with a three- or four-year payback. After the breakeven year, the owner continues to save the same number of kilowatt hours – realizing even greater savings compared with the likely higher fuel costs of future years.
• HVAC efficiencies. With today’s high fuel costs, it makes sense to replace less-efficient heating, ventilating and air conditioning (HVAC) equipment sooner rather than later. Rebates available for some upgrades, such as high-efficiency boilers or heat-recovery systems that save natural gas, help reduce the payback time. It often is profitable within five years to change a building with a low Energy Star rating to a high Energy Star rating through improvements such as installing digital control systems and variable-speed drives for chillers and air handlers, adding more modulating valves on hot and chilled water coils, and zoning different parts of a building based on heat load. While each of these measures alone may not produce tremendous savings, collectively they can save tens of thousands of dollars annually. Decisions on when to replace old equipment are made easier when the owner keeps and periodically analyzes detailed files – including comprehensive maintenance records on all building systems – just as we do, systematically, on each property we manage.
• Maintenance. Regularly scheduled inspections, maintenance and repair or replacement of building systems do more than extend their life and ensure that systems do not repeatedly break down. Tenant retention comes down to providing tenants with a building they are proud of and providing service efficiently and promptly at a fair cost. Creature comfort, cleanliness of the facility and the positive impression one gets upon entering the lobby are among the factors that make employees happy and productive in their workplace. The same issues help keep a leased building in a highly marketable state and enable an owner to command optimum rents consistent with the market.
There also are cost-saving opportunities in waste removal, elevator maintenance and security through bidding-out contracts to suppliers known to be reliable and cost effective.
• Asset management. A highly systematic approach to controlling costs and expenses also can save money. It should include regular analysis and budgeting for improvements, and close supervision and control of building operations and maintenance staff as well as vendor and contractor projects. For owners of leased buildings, there are additional issues involving timely billing and collection of revenue, lease administration and tenant retention.
• Manage property or hire a property manager? For most small business owners who also own their own small facility, it makes sense to have a savvy office manager and/or in-house operations and maintenance employee handle routine operational and maintenance tasks. Once facility issues begin to interfere with core business administration or if these employees do not have the expertise to deal knowledgeably with outside contractors on larger issues, it is time to consider a property manager.
In addition to building operation and maintenance, a full-service, property-management firm can provide a full array of options, including asset management, construction, real estate development and other professional assistance, such as operating parking facilities and setting up safety and security services. Large facility owners may hire a property- management company that can put a highly experienced manager on-site, while owners of medium-size buildings may share the cost of professional property management with other nearby companies.
No matter your choice, whether you manage your own property or hire a property manager, during this challenging economic climate, the time to evaluate and institute cost-saving improvements is now. •
John J. Macliver is president and CEO of MPM Property Management LLC, a multifaceted commercial property-management firm serving southeastern New England. For more information, visit www.mpmproperties.com.