When a disgruntled client created a serious security situation at an affiliate office of Williams Financial Group (WFG) in Dallas, Texas, staff at WFG’s headquarters on the other side of town were unnerved, but with no obvious threat to their personal safety there was not much cause for alarm when it came to the security of their own building. So when property managers immediately dispatched the head of security to meet with staff, placed an officer outside their suite door, and provided additional security screening for WFG’s visitors that day, headquarters staff were duly impressed.
The response resonated with Maggie Moore, executive administrator for WFG, as a shining example of excellent tenant relations.
“Their responsiveness stands out,” Moore said, “as the right way to handle a shocking event. As we were trying to get a handle on what happened, knowing they were on top of itto the point of having someone standing guard outside our doorwas phenomenal. They provided more than security that day…they provided peace of mind.”
Don’t Wait for the Tough Times
It may be an extreme example, but it speaks a simple truth: When you think about good customer service, what comes to mind? A list of automated voice mail options, or a live person answering the phone? An annual survey, or a quarterly lunch to talk face-to-face? Almost without fail, it’s the personal touch that turns average into outstanding.
And with a still-struggling economy and national vacancy rates hovering around 18 percent, standing out from the competition through exceptional service is a must, but it can’t be rolled out only when times are tough.
Mike Kent, president of U.S. Real Estate Management Services for Colliers International, agrees, saying, “It scares me when people say, ‘We’re focusing on customer service now.’ It must be the most basic service you provide, and you can’t be the only one involved. If there’s only one person focused on a client, they’ll either have a rapport or they won’tthere is no in-between. So, have multiple contacts; if you can’t put your engineer out in front of tenants, or if you can’t ask your accountant to walk through financials with them, it’s going to be next to impossible to address their needs.”
Another way to prioritize tenant relations is to always think of tenants as king, regardless of market conditions.
Jim Arce, executive managing director of client solutions for Cushman & Wakefield of California, Inc., views tenant retention and recruitment as being about service first and bricks and mortar second. “It’s all about service and how you relate to tenants,” he said. “Your building may not be the newest or the best in town, but I’d rather be in an older building that is better managed. Since real estate is so competitive, service is what differentiates you.”
In order to quantify your service over the competition’s, Kent recommends touring the five most competitive properties quarterly in order to “know what your tenants are seeing first hand. The knowledge you’ll gain will give you the ability to be nimble…and will remind you why the expense of moving is almost never a deterrent.”
David Williams, COO of WFG and someone who recently moved offices after outgrowing the former space, agrees, saying, “We place a premium on a responsive management team, and we’ll move to get it. We want to work with people who care about us as tenants. Even if the answer to a request is ultimately ‘no,’ we want someone who is willing to work with us to find a solution rather than someone who looks to the lease for an answer.”
Nancy Pinson, an administrative office manager in Korn Ferry’s Dallas office and a primary contact for her building’s property manager, points to the “above and beyond” moments that help differentiate great property managers from average ones. “My company was celebrating its 40th anniversary, and being a global firm, we were asked to send photos of our office location. We wanted to get a photo of the Dallas skyline from the roof, but we couldn’t do that because of safety reasons. But rather than just say, ‘No,’ our property manager checked with other tenants who had balconies on upper-level floors and arranged for a photo shoot. Maybe it’s not a huge thing…but it’s a good example of their willingness to go the extra mile for us.”
Money Makes the World Go ‘Round?
Understanding financials is also a key component to differentiating a management team’s ability to service clients. Just as meeting personally with tenants and getting to know their needs is important, so are face-to-face meetings to talk financials.
“Sit down with decision makers at least quarterly,” advises Kent, “and find out how they’re performing. Tenants are very receptive; people want to talk about what they do, and it’s surprising what they’ll share. You’ll gain good intelligence, which will allow you to play a bigger role within your own company. We’re here to add value and add net operating income (NOI) to the bottom line, and this is one way to demonstrate that you’ve explored options and can say, ‘This is what I recommend, and here’s why.'”
Having insider information will also give managers more negotiating power when it comes to renewals and financial concessions, a more common occurrence in today’s economy.
“Tenants are looking for someone who can relate to the challenges they’re facing,” said Arce. “They need someone who will listen, consider alternatives and be flexible. We’re seeing blend and extend deals [dropping rent in the short term but extending the length of the lease], straight rent reductions, and the provision of amenities in exchange for retaining a tenant. But in order to do any of it, you have to know their financials. Be rational and do your due diligence.”
How Important is Green?
One of the final pieces of the puzzle is a firm understanding of tenants’ expectations when it comes to sustainability. Is interest waning? Does a tenant really just care about lowering operating costs, which reduces their rent? Or is it merely a way to leverage social responsibility in marketing materials? Obviously, the answer depends on the tenant…but sustainability is still relevant.
“Green is a hot button for tenants,” Kent said, “and owners cannot afford to put it on the back burner because they feel priorities have changed in these economic conditions.”
Arce pointed out that tomorrow’s workforce will continue to drive green: “Just as we’re trying to attract and retain tenants, employers are trying to attract employees…and the new generation has grown up in a far more socially conscious environment. Sustainable consciousness has to be in the top three of any CEO’s list. Our clients are seeking EnergySTAR and LEED certifications, and although they can’t charge a premium for it, they have to provide it as part of the standard package.”
Bob Best, a LEED accredited professional with Jones Lang LaSalle in Chicago and director – sustainability, markets, is striving to make the company one of the world’s most sustainable.
“Sustainability is good business,” he said, “and it’s important to tenants. A 2009 survey of our tenant representative brokers showed that five years ago, people might not have considered it in a space decision, but a year ago, it was a factor one-third of the time. Today, it’s more like half the time.”
“One of the most enduring aspects of sustainability is that it’s the one area in which everyone is in agreement,” Best added. “In lease negotiations, you typically have people sitting on opposite sides: One wants maximum rates for services; another wants maximum services for minimum rates. There’s conflict everywhere…except with sustainability. We all want to use less energy and less water and be more environmentally responsible. It’s the one point where everyone wants to cooperate.”
