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References
NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.
Office Building Trends
Weak Demand, Still-Rising Vacancies Predict Downward Trend in Office Valuations (CommercialEdge, Feb. 20, 2024)
- The average U.S. office listing rate stood at $37.35 per square foot, falling 1.8% year-over-year
- Up 130 basis points year-over-year, the national vacancy rate was 18% in January
- Under-construction office space reached 97.2 million square feet nationwide, accounting for 1.4% of the total stock
- Office sales amounted to $1.5 billion through January, with assets trading at $195 per square foot
Office Space: What Recent Trends Mean for Businesses (Forbes, Jan. 24, 2024)
Because of the pandemic and work from home (WFH) trends, many Class B and C office buildings have a higher vacancy rate. Hence, many of these buildings are now worth less due to less expected future revenue and lower present values for whatever future revenues do come in because of higher debt borrowing costs.
The Office Market Had It Hard in 2023. Next Year Looks Worse. (The Wall Street Journal, Dec. 19, 2023)
Office demand shows no sign of returning to prepandemic levels. While the number of full-time remote employees has dwindled, hybrid workplace policies look here to stay. In the fourth quarter, 62% of U.S. businesses allowed employees to work from home some days of the week, up from 51% in the first quarter, according to Scoop Technologies.
The Future of the Office (U.S. Chamber of Commerce, Jun. 22, 2023)
- 46% of commercial real estate professionals indicate that zoning/permitting is impacting their ability to convert current office spaces into other uses.
- Flexible and hybrid workspaces that promote collaboration with offsite teams will be hot trends over the next five years.
- 71% of builders and 68% of architects are receiving more frequent requests to convert existing office space for a different use compared to one year ago.
Offices Change, Accommodating New Work Styles: To Appeal to Various Clients and Work Styles, Office Building Design Is Shifting (Consulting-Specifying Engineer, 2023)
Employers are providing “more flexible and comfortable spaces, increased collaboration space and improved technology, which all support the many changes that companies have seen over the past couple of years. For the buildings themselves, we are starting to see some movement on the building provided amenity space including lobby improvements and added seating areas to provide users with alternative work locations. For new office buildings under construction, we are seeing these amenity spaces receiving much more time and attentional to provide an improved experience within these buildings.”
Leases
Property Leases: What SMBs Need to Know (Business News Daily, Feb. 15, 2024)
There are several core elements of a commercial lease, such as the cost of rent, additional fees, the security deposit and the length of the lease.
Understand the Different Types of Commercial Leases (fitsmallbusiness, Jul. 5, 2023)
Full-service leases
- Most common type of commercial lease for office buildings
- Landlord is responsible for paying the expenses associated with the property, including property taxes and insurance, repairs and maintenance, and utilities and janitorial services
Net leases
- Single net lease: A tenant pays rent plus a pro-rata share of the building’s property taxes.
- Double net lease: A tenant pays a portion of the property insurance in addition to rent and property taxes.
- Triple net lease: A tenant pays the pro-rata share of property taxes, property insurance, and CAMS. Triple net leases are the most landlord-friendly and are most common with restaurants and retail locations.
Modified gross lease
- A compromise of the full-service lease and the net lease. A tenant might pay for their portion of their property taxes, property insurance, and CAMS, but they pay it as a lump sum payment along with their rent
Eight Things to Watch Out for When Leasing a Commercial Property (Forbes, Apr. 23, 2019)
- Hidden fees
- Guaranteed tenant improvements
- Lack of clearly specified goals
- Maintenance and repairs
- Tenant credit and financial history
- Default/breach and cure/remedy terms
- Pass-throughs
- Ancillary terms
Safety & Security
Effective Property Management Tips for Success (ESS Global Training Solutions, 2024)
- Communicate effectively with tenants, owners, and vendors by leveraging communication templates and technology.
- Be proactive in managing tasks, prioritize efficiently, and avoid procrastination.
- Stay updated with industry knowledge, trends, and regulations to ensure high-quality service.
- Maintain a positive attitude, remain resilient, and effectively handle challenges in property management.
- Implement a structured tenant screening process to find reliable, responsible tenants.
Criminal Acts and Activities: Landlord Liability FAQ (NOLO, May 23, 2023)
“Landlords have some degree of legal responsibility to protect their tenants from assailants, thieves, and fellow tenants. Landlords aren't expected to make their rentals into fortresses. But they are required to take reasonable precautions to protect tenants from criminal activity, warn tenants of known risks, and, when possible, take measures to protect their neighborhood from illegal activities committed by tenants.”
The Ultimate Property Management Guide to Tenant Safety (Valentis, Apr. 15, 2021)
“Every property owner is responsible for the well-being of people on their property. By having the right protections in place, you can absolve yourself of liability, protect your property, and ensure the safety of your tenants, as well as any visitors. There are so many benefits to creating a comprehensive security plan and absolutely no risks associated with this approach. For the safety and security of your property as well as your residents, take the time to create a plan that works for you. When in doubt, a good security team can help you to find the solutions that you need to guarantee everyone’s safety.”
Problem-Solving Strategies for Property Managers (REALTOR® Magazine, May 12, 2020)
As businesses begin to slowly reopen their doors to employees and the public, another way property managers can help is through maintenance and updates that mitigate risk, said Aeschliman. Some building owners are looking at installing touchless entries, card readers at elevators or doors, and increased janitorial services, she said. “When you communicate with your buildings and tenants, tell them what you are doing differently to minimize risks to both them and the building,” said Aeschliman.
Maintenance
Strategies For Effective Commercial Building Maintenance (Property Manager Insider, Mar. 1, 2024)
- Regular preventive maintenance, including seasonal inspections and repairs, extends the life of commercial building equipment and avoids costly breakdowns.
- Sustainable practices in building maintenance not only contribute to a healthier environment but can also result in cost savings through energy efficiency and potential green tax incentives.
- Asset management software is crucial for tracking maintenance schedules, service histories, warranties, and ensures compliance with regulations to prevent fines or legal issues.
- Customized maintenance programs tailored to the specific needs of each property enhance operational efficiency and ultimately protect the investment value of commercial buildings.
The Ultimate Guide to Commercial Property Maintenance (Teletare, 2023)
“Commercial property maintenance is a major consideration for any real estate investor. If you’re going to purchase a property you need to know what your responsibilities will be and have a plan for how you’ll maintain all your assets.”
Leveraging Property Management To Increase The Sale Value Of Commercial Property (Forbes, Nov. 12, 2021)
“An excellent property management company will make adjustments and upgrades to your commercial property that keep it from suffering damage over the years, not only maintaining its value, but raising it.”
4 Essential Commercial Property Management Best Practices (BuildingsIOT, Nov. 11, 2021)
“HVAC, lighting systems, water usage, etc. traditionally aren’t on the same side of the ledger as tenant issues, but both impact your bottom line. And, increasingly, the two sides of the business are connected. Today, commercial property management best practices recommend using advanced technology stacks with analytics to improve the occupant experience while optimizing energy efficiency and building performance.”
Useful Websites
Building Owners and Managers Association (BOMA) International
A primary source of information on office building development, leasing, building operating costs, energy consumption patterns, local and national building codes, legislation, occupancy statistics and technological developments
With an emphasis on executive profiles and industry and economic data, Commercial Property Executive also includes reports covering finance, sustainability, technology, property management, education and legal and regulatory issues.
IREM: Institute of Real Estate Management
The only professional real estate management association serving both the multi-family and commercial real estate sectors. IREM is an international organization that serves as an advocate on issues affecting the real estate management industry. IREM offers the Certified Property Manager (CPM) designation and Accredited Commercial Manager (ACoM) certification
SIOR: Society of Industrial and Office Realtors®
The leading professional commercial and industrial real estate association with more than 3,200 members in 20 countries. SIOR represents today’s most knowledgeable, experienced, and successful commercial real estate brokerage specialists. SIOR offers the SIOR designation
eBooks & Other Resources
eBooks.realtor.org
The following eBooks and digital audiobooks are available to NAR members:
The ABCs of Property Management (eBook)
The Real Estate Property Management Guide (eBook)
Commercial Real Estate Investing (eBook)
The Complete Idiot's Guide to Success as a Property Manager (eBook)
The Economics of Commercial Property Markets (eBook)
Happy About Apartment Management (eBook)
Facilities Management: Managing Maintenance for Buildings and Facilities (eBook) E
The Landlord’s Kit (eBook)
Landlord's Legal Kit for Dummies (eBook)
Opportunities in Property Management Careers (eBook)
Principles of Real Estate Management (eBook)
Property Management Kit for Dummies (eBook)
Books, Videos, Research Reports & More
As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.
Commercial Property Management Answer Book (New York: Vendome Group, 2008) HD 1394 C73
Managing and Leasing Commercial Properties (New York: John Wiley & Sons, 2007) HD 1394 AL2ma
Shopping Center Management and Leasing (Chicago: Institute of Real Estate Management, 2005) HF 5429 In7sc
Spotlight on Security for Real Estate Managers (Chicago: Institute of Real Estate Management, 2005) HD 1394 In7o
Glossary of Real Estate Management Terms (Chicago: Institute of Real Estate Management, 2003) HD 1365 In7g
Office Building Management (Chicago: Institute of Real Estate Management, 2002) HD 1394 I2
The Tenant Retention Solution: A Revolutionary Approach to Commercial Real Estate Management (Chicago: Institute of Real Estate Management, 1995) HD 1394 In8
The Resident Retention Revolution (Chicago: Institute of Real Estate Management, 1994) HD 1394 In8r
Managing Your Maintenance Programs: A Guide to Implementing Cost-Effective Plans for Properties (Chicago: Institute of Real Estate Management, 2010) HD 1394 In7my
Have an idea for a real estate topic? Send us your suggestions.
The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.