Owning a commercial property management, consulting, and development business is great, but not a week goes by that some type of challenge presents itself. Each challenge gives me the opportunity to grow the business in one of two directions: positive growth or negative growth. I thought I’d share an experience from the past few weeks that displays us going in the right direction when it could have gone very differently.
Basically, my company took over the management of an older commercial building that has been going down hill for several years now (financially and structurally speaking) from a combination mismanagement and ownership neglect. It’s a 40,000 SF property with only 50% occupancy in a tough sub-market around Everett, WA. Beyond the maintenance woes, we inherited several tenant vs. tenant issues that needed quick attention, and a few of the tenants had/have serious financial problems within their businesses as well. Since the property hasn’t been performing well for several years, the income it currently generates doesn’t cover all the property expenses and the owners mortgage. Still, the property needs several big ticket items (aka lots of cash from owners) addressed to keep from losing what tenants are left (aka remaining income stream). Tough cookie huh!
Well, I enjoy challenges like this. At least I enjoy them until attorney’s get involved! Unfortunately for everyone, an attorney did get involved on behalf of their client (a tenant at the property) who made a checklist of claims against previous property managers, the property owner, and even us (who wasn’t even empoyeed at the time stated). Essentially, half the claims were fair while half were pulled out thin air, but regardless we had address the issue. We went back and forth via official letter this and certified that, while nothing positive was really taking place. Finally, I decided to make the call. Enough with the back and forth games, let’s get to the heart of the matter and deal with the real issues at hand. I called up the attorney sending me the wheelbarrow loads of paperwork and said, “let’s talk!” After listening to his concerns and detailing our position and action plan for the property, we came to a mutual agreement that made everybody happy within a few minutes. What had been a three week merry-go-round of letters and sidestepping was resolved within 15-minutes of a phone call. While there are times for tough negotiations and cloak and dagger like maneuvering in business, sometimes it’s more effective to just make the call.
Money Talk With Gabe 