Commercial Real Estate Job Functions

APPRAISAL

Appraisers value properties for sale transactions, portfolio valuations and sometimes to assist in litigation.  Appraisers prepare estimates of the fair market value of properties after a systematic analysis of the prices of similar properties, or based on an analysis of discounted future returns.  This valuation estimate requires market analysis and the subject property being appraised.  Appraisers gather a series of facts, statistics and other information regarding specific properties, analyze this data, and develop opinions of value.  Each appraisal assignment challenges the appraiser’s ability to put analytical skills into practice, exercise good judgment and communicate effectively.  Most appraisers specialize in specific types of commercial property and are usually involved in: site analysis, property tax assessments and appeals of assessments, buy versus lease decisions, lease negotiations, portfolio re-valuation, investment analysis and business mergers or dissolutions.  Many real estate management firms have in-house appraisal divisions.

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ASSET MANAGEMENT

Asset management is the management of the property as an investment.  Usually, the asset manager is hired by the building owner and is responsible for setting and measuring the financial performance goals for the property, which are then implemented by the property manager who manages the day-to-day operations.  The main functions of an asset manager are to formulate and implement a business plan and approve budgets for each property in conjunction with the owner’s investment goals. Depending on the owner’s goals, the asset manager may be involved in acquisition, day-to-day management or sale (known as disposition) of the property.  The asset manager keeps up-to-date with all of the economic and financial market factors that may influence the value of the property.  In some organizations, property and asset management responsibilities can overlap depending on the type of organization and the kind of property being managed.  In other organizations, those functions are separate and may be performed by members of two different companies.

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COMMERCIAL BROKERAGE & LEASING

Leasing agents act as middlemen by finding tenants for the building and by renewing tenant leases at the building.   Brokers may also be involved in the acquisition or disposition of the assets. Although a property management team may handle lease renewals, the leasing agents are closely involved in the negotiation of lease terms or tenant acquisitions.  Leasing is typically provided by a real estate brokerage firm, which is regulated by a state licensing board.  The head of the brokerage firm is the broker and the broker employs agents (sometimes called associate brokers, agents or salespeople) to assist in the leasing function.  All of the business of that brokerage firm belongs to the broker, and the broker is ultimately responsible for property values, tax and regulatory and legal compliance for all activities of the brokerage. 

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CONSTRUCTION PROJECT MANAGEMENT

The goals of the construction project manager include providing a safe project environment for all workers, visitors and the public; meeting or exceeding the needs of the owner; and making a reasonable profit while treating all partners in the construction process with respect and fairness.  While the main responsibility of the construction project manager is to monitor all aspects of the design and construction of capital and tenant improvement projects, some other responsibilities include: planning and tracking of budgets, managing labor, establishing time estimates, getting appropriate equipment operators and construction crews and coordination of the project with building engineers.

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DEVELOPMENT

The main responsibility of a developer is to acquire land and prepare it for development or acquire a site and oversee the property’s construction process.   Depending on the size and scope of the project, the developer may hire architects, engineers, land planners and other specialists in addition to the construction contractor.  Specific responsibilities include property and site selection, obtaining all legal entitlements and financing, as well as supervising design and construction.  Managing the construction process is one the most challenging aspects of development and rehabilitation.  Projects must be completed on schedule–often on tight deadlines– and within budget, and they must meet design and construction specifications.  Developers specialize in residential or commercial development and within these they specialize by property size and type.

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FACILITY MANAGEMENT

Facility management is very similar to property management, except that it focuses on the operational and strategic planning of owner-occupied, corporate buildings as opposed to multi-tenant buildings.  A facility manager  is responsible for directing contractors, architects, vendors and building managers in the maintenance and operation of the facility so that is it safe, clean, secure and meets all government, environmental and health requirements.  Facility managers may negotiate contracts and oversee renovation projects to either expand a facility or improve efficiency. They also work directly with the Human Resource Department to address any organization changes.

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PORTFOLIO MANAGEMENT

Portfolio managers manage several real estate portfolios, each representing a group of properties.  Responsibilities include acquiring properties, managing the property management team by hiring the appropriate asset and/or property managers and measuring the portfolio results.   

This unique position requires portfolio managers to maintain both a "big picture" perspective on each property, while also having a thorough understanding of the day-to-day operating issues and decisions. Portfolio managers create portfolio-level strategies required to meet their clients ' objectives with a focus on maximizing each asset’s income, cash flow and long-term value. Each strategic plan is based upon the portfolio manager's knowledge of both current market conditions and the challenges and opportunities facing the individual properties in the portfolio. In executing the strategic plan, portfolio managers are responsible for creating and implementing operating, financial and capital budgets, approving property marketing plans and lease transactions, resolving property issues in conjunction with on-site management, and monitoring adherence to partnership and loan agreements. Portfolio managers can also oversee the leasing and property management activities at each of the buildings in the portfolio.

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PROPERTY MANAGEMENT

Property management is the management of the day-to-day operations for one or more multi-tenant buildings, as well as the financial management of the property, including optimizing rental income, tenant retention, building maintenance and staffing as well as implementing efficient operating procedures.  A property manager is responsible for every aspect of the building and is accountable to all of the people that come in contact with the building—owners, tenants, visitors, building service contractors. The property manager must understand the building owner’s strategy for the property and develop and implement a plan to achieve the owner’s goals. The property manager must also be a capable leader, who can guide a multi-disciplinary team of professionals to create value and achieve the owner’s investment objectives, satisfy the tenants and accomplish operational excellence at the property.

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