Balancing property expenses when it comes to asset services the devil is in the details.

• Author: Vanek, Jeff

A large office building is like a mini city in and of itself. Hundreds of people work in the building, and they need a safe, secure and comfortable environment. Building managers must provide for effective building systems, utilities, proper waste-water systems, trash removal and recycling, ventilation, cooling and heating, power and lighting, parking, grounds upkeep and maintenance. They also have to deal with issues like lease administration, accounting, financial reporting and taxes.

"When you consider all the factors involved with commercial real estate, it becomes very apparent why it's so important to have a knowledgeable professional managing these properties," says Randy Owen, CPM, managing director of asset services at CBC Advisors.

Billions of dollars are invested in commercial real estate by private and institutional investors each year. Given the staggering investment these buildings represent, it makes sense to have a professional who can not only manage the investment but maximize its return both short and long term.

"There is a lot of money and capital at risk in commercial properties," says Owen. "Most commercial real estate is income-producing property, be it an office building or a shopping center. The owners or investors expect the property to be protected and provide a reasonable return on their money."

PROFESSIONAL STANDARDS

What comes to mind when you think about property managers?

"In the early 1900s, there was a stigma about property managers. It generally came from the old apartment building type of situation, with unscrupulous owners who were only interested in how much money could be squeezed out of the tenants. They hired a low-skilled maintenance person to fix things who barely kept the building habitable, skimping on repairs and not keeping things up to code. Times have definitely changed with modern-day property management," says Owen.

In the early days, real estate management was mostly a profession learned on the job. The profession has made significant efforts over the years to ensure standards of professionalism and competency in the industry. With the increase in sophistication needed to manage properties, property managers have had to become better educated. In fact, some colleges are beginning to offer degrees in the field, such as Brigham Young University's Bachelor of Science in Facility and Property Management. And several industry organizations offer professional designations.

The Institute of Real...