"Retain your Tenants, Retain your Cash Flow"
      by Richard Yaffe, R.A. - Vice President-Asset Management

Yes, the current economic condition is improving, albeit slowly. With the assistance of a professional property management team, building owners can realize gains that outpace the slow recovery.

At Triangle Properties, a real estate owner and management firm serving Long Island for over thirty years, we have developed programs to successfully manage real property assets. For now, and throughout the next several months, we believe that tenant retention is the Number One factor in realizing positive cash flow. There's nothing more disquieting to a building owner than losing even one month's rent. No one can turn back the clock to collect rent; once a month has passed, rent can never be recovered.

With new commercial construction still at a slow pace, many landlords are in a management-focused mindset. We see a boom in the capital-improvement sector of construction, with attention towards sprucing up older buildings with new parking lots, landscaping, building lobby and public corridor redesign, window replacement, and modern signage, to name a few. Too often, off-site building owners fail to see the slow dilapidation of their properties - but the tenants who go to work every day take notice. Without proper refurbishment and maintenance, owners will find that they begin to lose tenants, and they may never find out the reasons. Often times, a simple paint job will suffice, other times a major capital expenditure may be required. The property manager who is intimately involved with an owner's property can field tenant concerns before they result in vacancies.

In order to retain tenants, managers can offer comprehensive services, including project management, brokerage, and architectural services. Often times, we will begin the retention process well before the lease is set to expire. By listening to tenants, we understand what's important to their needs, and focus our attention in servicing those needs. For example, there is a restaurant in a shopping center that we manage for a lending institution. The lease term didn't terminate for another few years, but the restaurant expressed an interest in extending the term for a longer period than our client preferred. In an effort to protect our client, and satisfy the tenant's needs, we were able to negotiate a deal whereby the restaurant would make a substantial capital improvement to the premises, and pay an increased rent with proper escalations. Both the landlord and tenant were satisfied with the deal, and both felt their interests were defined and protected.

Tenants are the customers of building owners. The phrase "keep the customer satisfied" resounds for the property manager. Responding to tenant concerns will surely have a positive impact come renewal time. With the current global situation and the increase of alertness, we have seen tenants focus on added security measures. Whether it's implementing a sophisticated cardkey access system, patrolling the parking areas and interior public spaces, reviewing evacuation procedures, or making sure parking lot lights are functioning, the property manager advises the building owner based upon tenant concerns. Of course, the manager must also be proactive on these and other issues to keep problems to a minimum.

At the end of the day, proper accounting and financial reporting is of vital interest to the building owner. When a manager takes over a property, deciphering all the business terms of the lease, and implementing them, is critical. Many times, we have seen building owners not collect what is rightfully due them, either because they are unaware, unwilling, or because they simply don't understand the complex intricacies of certain clauses. It becomes the manager's job to carry out all the terms of the lease, and provide the owner with the best results, diffusing tenant dissention with explanation and finesse. With the aid of sophisticated software, we're able to track income and expenses, capital improvement history, lease termination dates, basic property data, and more.

Over the next quarter, tenant retention will prove to be a crucial operative in separating those building owners who continue to realize positive cash flow, from those who don't. By providing expertise, integrity, and dedication, property management firms such as Triangle Properties, can help building owners reap long-term rewards.