By Sandra Boyle, Senior Managing Director
As CRE management professionals, we all perform within current, fundamental industry standards. Today’s standards indicate that management success is achieved by managing an asset with client guidance, routine asset inspections and effective financial intelligence gained thorough budget preparation and maintenance.
But, we have to ask ourselves: are these industry standards meeting the growing expectations of our clients and institutional investors? Many times, meeting base-line industry standards isn’t enough to achieve management excellence. In today’s CRE environment, each client and asset is unique, and meeting and exceeding client expectations cannot be achieved with a one-size-fits-all approach. So, how do you exceed expectations? How do you determine the best way to make an asset competitive in its market?
Contemplate the questions below. If you answer “yes” to any of them, a SWOT Analysis – measuring strengths, weaknesses, opportunities and threats – may be the perfect tool for you and your team.
- Has complacency set in, and are you or your staff saying, “We have always done it this way”?
- Have you managed an asset for a long period of time without a lot of change or direction from the client? Is market share slipping?
- Have you had an asset manager change and/or is your management contract in jeopardy?
- Has a client asked for your help in acquisition due diligence?
- Are you about to pitch a property management assignment and you are not familiar with the market or the asset?
A SWOT Analysis yields a structured evaluation of an asset using a methodology that gauges the degree to which the asset’s internal environment matches the external environment. Users of SWOT Analysis ask and answer questions to generate meaningful information for each category to find the asset’s distinct competitive advantage.
Strengths: characteristics of the asset that give it an advantage over others.
Examples: Location, design, operational management, energy efficiency, amenities, occupancy and tenants.
Weaknesses: characteristics that place the asset at a disadvantage relative to others.
Examples: Age of structure, lobbies, mechanical equipment and lack of infrastructure to support current leasing efforts.
Opportunities: elements that the project could exploit to its advantage.
Examples: Demand response strategies to reduce energy, reposition lobby and create amenities.
Threats: elements in the environment that could cause trouble for the business or project.
Examples: Development of competitive newer buildings, market shifting for tenants and environmental or governmental issues.
There are countless examples of successful SWOT analyses resulting in elevated performance. Recently, our own Northern California team performed a SWOT analysis on a Class A high-rise assignment in San Francisco where complacency was not only visible, but it was rumored that the institutional investor was looking to make a change in management. The SWOT analysis successfully created a heightened awareness of the team’s strength and a solid road map for the future management strategy. In this case, it was determined a full re-positioning of the asset was essential to its success. Armed with this knowledge, the recommendation was presented to the investor and resulted in an extended and successful management agreement.
The kiss of death for any property management team is the inability to remove themselves from the day-to-day details of management. It is imperative to take regular steps back to gain an analytical, high-level understanding of the asset in its greater context. This practice will take your property management to the next level – and will make a difference in the bottom line for your investors!
Sandra joined Cushman & Wakefield in April of 2011 and currently serves as Senior Managing Director, Asset Services. In this role, Sandra is responsible for the oversight of over 40 million square feet in 11 counties in Northern California. Prior to this role, she served as Chief Operating Officer for San Francisco. Sandra was responsible for the day-to-day oversight of Cushman & Wakefield’s San Francisco office including all service lines, business development, client care, and recruitment.