Tenant relations has always been one of the essential functions of a commercial property manager. Property management involves a myriad of core responsibilities, many of which are inherently objective: collecting rents, property maintenance, accounting, etc. However, tenant relations and communications are more interpersonal than logistical, more art than science. Most of the time property managers are the only line of communication between tenants and building owners (landlords). During the COVID crisis, the importance of this role became more pronounced than ever.
Over the past 18 months, we often commented in the office (or more precisely on Zoom meetings) that our jobs had changed from property managers to debt collectors — akin to when a bartender or hair stylist quips that they are therapists. Nearly every business was negatively impacted by the pandemic; with over 400 tenants, we had to deal with many who were struggling to make their rent payments. We instantly became the vital communication link between distraught tenants and equally distraught building owners who feared not being able to make their mortgage payments.
Property Managers Open Lines of Communication
It is not uncommon for there to be mistrust, or even an adversarial relationship, between landlords and tenants. During COVID, an open approach to property management paid enormous dividends. At nearly every commercial property, we managed “workouts”. These negotiations involved rent abatement, rent forgiveness, rent deferral, repayment plans, lease re-negotiations.
We had to navigate the lines between tenants who were trying to determine how much they thought they could pay and still stay afloat, and landlords who had to assess how much income loss they could bear, and the risk associated with unexpected vacancy. And of course, all of these workouts required an enormous amount of legal work as well.
Navigate Tenant Relations With Trust
Entering these negotiations with a high level of trust from tenants is crucial to navigating these types of tumultuous waters. The tenants trust that the property manager and landlord are working to try to assist them in every way that they can.
If struggling tenants go into negotiations with an attitude of “well, the landlord has never looked out for me,” we believe the likelihood of a tenant walking away from their lease is much greater. We completed over three dozen workouts, and as of this writing have only lost six tenants due to default. We recently had a mix-up with a tenant’s online rent payment; when we resolved the issue, the tenant responded with an email, “Thanks Brian, after everything she (the landlord) has done for us, I would hate to EVER make a late payment!”
Ensure Future Success Between Landlords and Tenants
Hopefully most of the COVID crisis is behind us (fingers crossed) and we regain some normalcy in our business operations. But no matter what the future holds, we believe the recent market turmoil has stressed the importance of maintaining open lines of communication between landlords and tenants. Good communication is imperative to ensuring everyone’s success.
Brian Lantzy is the Vice President of Operations at Wheelhouse Commercial in Denver, Colorado. For more information about how Wheelhouse Commercial can help manage your properties, please call 303.518.7406 or email firstname.lastname@example.org.