Another factor that influences the nature of the work performed is the type of property being managed. There are a wide variety of property types, each having its own peculiarities and placing unique demands on the manager of that real estate.
From a very broad perspective, the types of properties that require management fall into two categories: residential properties and commercial properties.
The term commercial property in its broadest definition encompasses all real estate development that is not exclusively residential and typically refers to properties where a commercial activity takes place. This includes:
- Office buildings
- Specialty office buildings, most notably medical office buildings
- Shopping centers, strip centers, malls, retail properties
- Research parks
- Airports, marinas
- Warehouses − where space is leased for storage of inventory, excess materials, and the like
- Self-storage properties or mini-warehouses – which resemble rows of attached garages and are used by individuals and small businesses to store and secure their goods themselves
- Industrial property − which can range from large single-user properties to incubator space for small business start-ups
Although there are many similarities between managing residential and commercial properties, there likewise are distinct differences. The obvious differences are the nature of the tenant, the length of the lease term, and the complexity of rent payments.
Managing and leasing shopping centers generally is more complex than other property types. In addition to managing the property itself, the real estate manager also can be directly responsible for the continued growth and success of the tenants and their business enterprises. Management determines the tenant mix, with an eye toward selecting retailers who serve the shopping center’s customer base and complement the center’s existing uses. In addition, managers of shopping centers must provide a clean and safe environment and participate in marketing programs that target the demographics and psychographics of the shopping center’s trade area.
The office building market is sophisticated and competitive, requiring an experienced and responsive management approach. An office building owner generally has more maintenance responsibilities than the manager of other property types. Emergency procedures may be more involved for the office building owner because of the many people concentrated in a vertical tower. Parking and the movement of people in and out of the building are management concerns, and the mechanical, safety, and energy conservation systems are highly technical. Medical office buildings represent a niche market within the office building segment that requires even more specialized management expertise.
Industrial properties have evolved from utilitarian manufacturing buildings to modern, master-planned commercial developments. Industrial properties vary widely in function and size and may include anything from a 1,000-square-foot storage warehouse to an incubator building with many small start-up businesses to a multitenanted industrial park encompassing hundreds of acres.
Residential properties are those in which people live, either as rental tenants or as owners. Residential properties generally are defined by the type of ownership, the type of financing, and the types of tenants and/or residents. The list of residential properties that require management is extensive and includes, among others:
- Apartments – conventionally financed
- Apartments − government-assisted and affordable housing, which includes residential rental properties in which the landlord receives all or part of the rent payment from a governmental body
- Public housing − owned and managed by a local or state governmental agency
- Condominiums, cooperatives, homeowners’ associations, and other common-interest developments
- Rental single-family homes
- Mobile home parks – where residents generally own their homes but lease the land and pay an access charge for utilities and common areas
- Single-room occupancy apartments
- Student housing
- Senior housing and housing for the elderly – which can range from independent living to full-scale assisted living
- Military housing − owned and operated by the military directly or by private companies under contract with the military
Rental housing ranges from huge apartment complexes in high-rise buildings to single-family homes. Rental housing is in use 24 hours a day/seven days a week and must meet all of the needs of residents’ daily lives. This continuous occupancy tends to increase the demand for maintenance and repair. Service expectations are high. Because residents properly consider where they live to be “home,” there is an emotional investment in the real estate as well as a financial investment. For this reason, managers of residential properties must have superior people skills in addition to administrative skills.
Management of rental housing is affected by the architectural design and sign of the property, the amenities, the neighborhood in which the property is located, the types of residents, the owner’s goals for the property, how it is financed, etc.
For example, high-rise apartments with sophisticated HVAC equipment and elevators require specialized maintenance, while large garden complexes present challenges in maintaining lawns and recreational facilities. Similarly, additional skills and knowledge are required for managers of assisted and public housing, where management must balance the interest of all parties involved – owners, government agencies, and residents − and also thoroughly understand all applicable regulations.
The other opportunity for managers of residential properties focuses on common interest realty associations, where dwellings are owned individually along with a shared interest in the common areas. Examples are condominiums, cooperatives, planned unit developments, and homeowners’ associations. Managing associations is quite different from managing residential rentals because of the ownership structures involved and the fact that the condominium or homeowners’ association acts on common concerns of the property owners, including the hiring of property management service.