— By Steve Peldiak —
What to look for in a surplus property managing partner.
The safety of your families, workforce, partners and customers was understandably top of mind once COVID-19 emerged. Now we are all embracing the forthcoming transformations, especially within surplus properties. The landscape of commercial real estate is presenting itself in a mode of constant evolution; focusing on protecting these assets, managing them with intelligent cost savings, and finding a holistic turn-key service provider will be vital to sustain the success of a property portfolio.
The number of store closings this year could be even higher than previous records, according to estimates from the real estate firm Cushman & Wakefield. The firm estimated last year that as many as 12,000 major chain stores could close in 2020.
Closings create empty storefronts and properties that can successfully be managed and advanced for sale or lease with the right solutions providing partner. Successful surplus store management revolves around minimizing costs and hiring a trusted partner with expertise and experience in managing multiple locations with 24/7 nationwide response.
When turning over a portfolio of properties, ensure the chosen partner offers a blueprint of the four key factors to surplus store management:
- Turn-key Management
- Exterior Maintenance
- Interior Maintenance
Guiding data points and an opportunity to remotely govern all the locations from a cloud-based dashboard should be offered in all the four key factors.
A fully equipped turn-key management provider has the capability to entirely prepare the locations for dark status and navigate them to the next phases of either a sale or lease.
The right solution provider will prepare the locations for dark status by removing the exterior signing and brand-specific interior signing and distinguishable branding. Then they will secure the inventory, documents, electronics and equipment and have them relocated per client direction. Complete pack-up, assistance in transportation, BOL paperwork, secure warehouse storage, inspection and availability for third-party viewing of the inventory are ideal.
Once the location has become an empty surplus property, the physical building needs to be secured, maintained and managed on the exterior and interior.
Security should entail 24/7 monitoring and dispatching for all alarms: burglar, fire, RTU, water, temperature and humidity. RTU security is quickly becoming crucial as copper theft and vandalism are increasing at high rates throughout many regions. Service providers should be offering RTU theft sensors on their menus. The most ideal security systems should be affordable cell-based alarm equipment that offer real time activity data, logs and reports.
Avoid unnecessary fines by ensuring your exterior maintenance is compliant to local ordinances and that “No Trespassing” and “No Parking” signs are installed. Service partners should keep your parking lots cleaned up and offer cameras that provide daily snapshots of the lots for avoidance to dumping and parking. They should also handle any/all client CAM requirements.
Proper interior maintenance of locations should entail essential-only HVAC maintenance to control temperatures and to avoid mold growth and extreme cold. All electrical, plumbing and cosmetic repairs should be completed on a timely and cost-effective basis. Minimize wellness site visit costs with the capability to remotely govern and manage locations with IoT smart, cloud-based dashboards and sensors. Sensors from service partners can monitor and quickly respond, either stopping or significantly reducing the costs from property damage.
The property is now secured and managed; discussions and decisions begin to transpire. Key questions emerge: Place the property up for sale? Lease it out? Repurpose it? Or redevelop it? Manage your regulatory risk by aligning with a partner that can guide you through each phase with a due diligence menu of services while completing and compiling accurate data.
Due diligence services:
- Phase I ESA
- Property Condition Assessments
- American Land Title Association Survey Reports Hazardous Building Material Assessments
Environmental remediation, asbestos, mold, lead paint, soil and ground water testing all need to completed, filed and documented. The right provider will also offer select interior assessments to complete structure demolitions and comprehensive project design and bidding. Look for a nationwide company that can deliver a clean envelope while staying on budget, and meeting all environmental and building code requirements.
Therefore, owners and managers want to avoid large capital expenditures, protect your portfolio’s assets, keep costs low and align with a holistic service provider that offers turn-key management solutions, 24/7 security, intelligent interior and exterior maintenance and that has the ability to move your property or portfolio into their next strategic phases of being repurposed, redeveloped, sold or leased.
— Steve Peldiak is president of Watterson, a national provider of facilities maintenance, emergency response and environmental services supporting over 60,000 commercial properties.