Is your window cleaner managing your property? If so, you are still in good company. Nevertheless, more and more property owners are discovering that economical and successful management requires far more know-how than conventional management partners are able to deliver. A good reason to have a look at the success models which the future of this special market probably will belong to.
Yesterday all was still right with the world – there was the wonderful fullservice facility management offer which freed the property owner from all worries - by promising just that. Today – a decade on – that assumed all-purpose facade has begun to crumble.
It becomes evident that Facility Management alone does not suffice to get your property ahead economically. More and more investors even go so far as to say that Facility Management alone is not enough to maintain the value of your property – let alone to optimize it.
The most important point is the fact that most of the Facility Management service providers are lacking the competencies to really comprehend the property as an integrated whole. This results in the real concerns of the property owner being relegated to the background behind a number of enhanced janitorial works - concerns such as a real success oriented effort in regards to the full occupancy of the property.
New innovative models, for example Active Real Estate Management (ARM), show clearly where the journey of the property owner has to lead to if the management is expected to have positive effects on the property as a whole – in operating efficiency, profit and appeal of the property.
Peter Vogel and Guido Knümann of CODIC set in at exactly this point with ARM. If you look at the success of ARM, you will find it in the origin of the company. Long years of experience as project developers have provided the perspective to see the viewpoint of the property owner. “ARM is the consistent continuation of our service philosophy from more than 20 years of experience in project development.” The social competence of the company is equally developed. This allows for an exchange “at eye level” with investors and service providers.
“Through ARM investors learn again to think long-term. An important impulse which, as time passes, unfortunately too often goes missing after the completion of a property,” explains Guido Knümann. With a look at the sleepy dynamics in large parts of the property market, one can only agree with that. Similar remarks also come from the renowned…
Many investors and real estate owners erroneously assume that properties automatically rise in value over time.
However, experience shows that in fact inactivity leads to depreciation which can only be balanced with significant expenditures of time and money.
After the end of the initial rental agreement properties often leave an impression of being neglected as they are inadequately maintained and poorly operated. A permanent and dedicated contact of the property owners is often unknown, response times are disastrous and conflicts are bound to happen. Eventually such properties struggle with latent vacancy rates.
For this reason awareness has to be raised in the minds of the investors that the sheer conservation requires continuous follow-up investments, which exceed common operating costs and need to be financed out of the gross rental income. Only then is it possible for the property to remain competitive within its market segment.
Whereas increase in value can only be achieved through the awareness and realization of development potential. For this purpose,unique selling propositions have to be generated and maintained which often requires strategic repositioning of your real estate.
Conventional management performance in the range of Facility Management; consisting of Commercial Real Estate Management, Technical Real Estate Management or the mysterious Asset Management, can not live up to this superior goal.
Traditional property management service providers are lacking the expertise and the mission to take the perspective of the property owner and successfully develop properties further. In addition, standardised performance agreements and payment structures provide little incentive to act profitorientated on behalf of the property owner.
For the development, maintenance and extension of the competitiveness, as well as the optimization of the rate of return for yield oriented properties, CODIC offers proactive real estate management. Active Real Estate Management (ARM) also stands for All Inclusive Management.
ARM is the pragmatic approach which consist-ently provides service, return and resource oriented property management from one source by applying the skill sets of project development to the life cycle of the property after its completion. ARM is the consistent continuation of our service philosophy which has grown in more than 20 years of project development experience.
Analogous to project development, we created a three-stage scope of work consisting of the classic sequential modules: analysis, conception, and realization. Our remuneration is based on a combination of a basic payment for management performance and a cash flow oriented success compensation.
The performance potential of ARM already becomes obvious during the portfolio/ property analysis. As an instrument of the analysis we often apply our Mystery Test, with which we clearly identify and document the strengths and weaknesses of your present administrative structure, articulate comprehensive recommendations for an adaptation or reorganisation and define measures to improve value.
ARM only has positive affects on properties with sufficient development potential and healthy location criteria, both of which will be clearly defined and utilized in the process.On this basis we develop a coherent concept for value optimization in conjunction with a cash flow profit scenario, which shows the predicted income and expenses.
Thus we enable you to review your investment strategies, to consult with us and to adjust them. Based upon your decision we direct all measures towards the agreed upon strategy.
ARM takes responsibility with respect to your invested capital.
After the consultation, CODIC – unlike conventional consultants – takes responsibility for the realization of the agreed upon concept for value optimization on behalf and in authority of the owner. CODIC’s catalogue of measures is composed of the following performance areas:
- Rental coordination
- Technical Management
- Image developement
(PR/Marketing/Branding/Monitoring)
- Property management
(service and resource oriented)
- Reporting
Active and ongoing communication with existing and prospective tenants is the pivot of all efforts. The CODIC team’s many years of experience, strength in communication and social competence are the foundation for the success of ARM.
ARM’s focus is on sustainable full occupancy for investors, who would like to hold their real estate as an investment and prefer a service provider for its management to whom they can communicate at eye level.
YOUR REAL ESTATE IS YOUR CAPITAL.
YOUR TENANT IS YOUR RETURN!
The potential degree of effectiveness of ARM’s management performance is measurable for each property. It costs 12 times more to gain a new customer than to retain an existing one. With the cost of vacancy reduction, the so called re-rental costs, CODIC creates a property specific cash flow return scenario based upon the developed value optimisation concept. Especially for fully rented properties we simulate realistic scenarios for the time period after expiration of the initial rental agreements with and without ARM as a decision making aid for your (re-) investment strategy.
On properties with a low occupancy rate a sustainable optimization of the return performance can be reached with the help of ARM as long as the properties have a sufficient development potential.
On properties with a high occupancy rate ARM has preventative effects, as it avoids or reduces rerental costs and optimizes current income and expenses.
The highest degree of efficiency is obtained through timely implementation of ARM, which is cost efficient and pays off through a continuously high return.
