As a Property Manager, you want to optimize the service costs for your commercial buildings, ensuring tenant satisfaction and control of the costs. In this document, you will find practical tips for reducing service costs and decreasing energy consumption through sustainability. We also discuss limiting vacancy costs by installing submeters and determining a realistic advance payment for service costs. Additionally, we advise tenant communication, including conducting pre-consultations with (critical) tenants and providing clear statements. Lastly, we address some financial aspects, such as the timely preparation of reports and adjusting advance payments based on actual costs. With these tips, you can optimize the service costs of your commercial buildings and build a better relationship with your tenants.

Commercial

1. Make your building sustainable to reduce energy consumption:

A sustainable building can lead to significant savings on energy bills. Therefore, consider upgrading insulation and installing more efficient HVAC systems, LED lighting, and solar panels. In addition, it’s essential to regularly monitor and maintain the performance of these systems to ensure they continue to work optimally.

2. Limit vacancy costs, for example, by installing submeters:

Vacancy costs can be substantial. By installing submeters, you can limit costs by only charging tenants and vacancy for the energy they consume. This also makes it easier to encourage energy-saving measures among tenants since they can directly see the impact on their energy bills.

3. Determine a realistic advance payment at the start of the lease:

At the beginning of the lease agreement, you determine the advance payment for service costs. It’s essential to realistically decide on this advance payment based on historical data and anticipating future changes. An excessively high advance payment can result in unnecessary costs for tenants, while a too-low one can lead to deficits that need to be paid later. It’s also essential to regularly inform tenants about the status of their advance payments and promptly correct any deviations.

Communication

4. Be transparent with your tenants:

Transparency is essential to build trust with tenants and reduce concerns or complaints about service costs. Ensure tenants are informed about the different service costs being charged and how these costs are calculated. Also, communicate any changes in service costs timely and transparently so tenants can anticipate them.

5. Conduct pre-consultations with (critical) tenants:

In some cases, tenants may be critical of certain service costs. Therefore, it can be helpful to have pre-consultations with these tenants to understand their concerns and involve them in determining service costs. By being open to feedback and criticism from tenants, as a Property Manager, you can build a better relationship with them and create more understanding of the necessity of certain service costs.

6. Provide clear statements:

It is essential to provide a clear and transparent statement to tenants, explaining the different service costs and their corresponding amounts. It’s also necessary to promptly provide the information and address any tenant inquiries. You can reduce tenant disputes regarding service costs and improve their relationship by giving a clear message.

Financial

7. Prepare the service cost statement promptly:

It is essential to prepare the service cost statement promptly. Tenants have the right to a clear idea of service costs within a reasonable timeframe, for example, within six months after the end of the service cost year. By preparing the information promptly, you ensure tenants arrive quickly for it and allow them to process these costs in their records promptly.

8. Adjust the advance payment for service costs promptly:

It is essential to adjust the advance payment amount for service costs promptly. The advance payment amount is often based on an estimate of the expected costs. If the actual costs exceed the advance payment amount, it can lead to unpleasant surprises for tenants. Adjusting the advance payment amount promptly based on the actual expenses prevents tenants from unexpectedly having to pay higher prices and maintain control over the service costs.

9. Negotiate with your maintenance parties regarding index figures:

Maintenance costs are often a significant component of the service costs. Therefore, it is essential to establish good agreements with the maintenance parties and regularly evaluate them. In addition, it can be helpful to utilize index figures representing the cost development over a specific period. By negotiating with maintenance parties about these index figures, price increases can be better controlled, and you can gain more control over the service costs.

About the author:

Willem Jan Schouten has worked at CBRE for over 11 years as Associate Director of the Property Management department for the last seven years. In this role, he managed various real estate portfolios and led a team of 12 people.

Since February 2020, Willem Jan has further established and expanded the Property Management division. Our Property Management team is data-driven, incorporating intelligent tools and an efficient organizational model to provide services for every property. As a result, we can manage large portfolios and offer comprehensive services for all property owners.

Would you like to know more about our expertise in Property Management? Contact us for a coffee appointment with Willem Jan Schouten via +31 (0)20 226 00 99. We look forward to discussing with you and showing you what Spring Property Management has to offer.