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Investors vs. Users

Property Management & Facilities Management

Differing Goals; Same Outcome With “Living Asset” Management!

Jim Ricker, Vice President, Corporate Services with CresaPartners, wrote an article about the differences between property management and facilities management.  He stated that the former work for investors who own real estate for the cash flow from operating income and for the gain in value during their ownership term”, while the latter work for “the users of real estate who either own or lease their properties”.

Mr. Ricker outlines the goals of each group as being prioritized in opposite order from one another:

Investors:

  1. Income – maximize income from operations
  2. Value – increase the value of the property
  3. Customer relations – maintain tenant relations to help maximize occupancy and cash flow
  4. Operations – efficiently maintain the property in order to achieve the first three goals

Users:

  1. Operations – maintain the property in support of the resident business units, with an emphasis on ensuring that assets reach their useful lives and that interruptions to the business units are eliminated
  2. Customer relations – ensure that services are cost-effective and geared toward supporting the business units
  3. Value – maintain the value of the property in the event that it becomes surplus and available for disposition
  4. Income – not a priority, unless subletting of surplus space is involved

Now, here’s the Good News for both groups:  Properly managing the “Living Assets” on a campus will payoff in each area!

(I’ll present these in alphabetical order)

Outcomes of “Living Asset” Management
  • Customer relations – The landscape serves to establish the “first impression” of a property.  It also provides a setting for workers to be rejuvenated, either by enjoying the outdoors, or simply by looking out a window.  By implementing a living asset management program, owners can be assured that these benefits accrue in an efficient, cost-effective manner.
  • Income – When the horticultural requirements of the landscape are optimized to be in harmony with the budgetary requirements of the organization, the waste is eliminated, and the landscape can thrive without requiring an inordinate expenditure each year.
  • Operations – Ongoing operational costs are simply a reality when it comes to maintaining the grounds of a property.  But, these can (and should) be done with an understanding of what specifically is driving the costs.  With illumination, wise decision-making is made possible, and the organization reaps the benefits.  With proper planning, the initial capital investment in the landscape can grow into a mature setting – reaching its full life expectancy (rather than struggling for survival, or worse yet, being butchered and having its life cut short by overly zealous, but uninformed maintenance personnel).
  • Value – with the proper “Living Asset” management, the landscape’s value increases over time as it grows and matures, providing a beautiful setting that can be enjoyed and appreciated by all.

There’s a whole lot more to “Greening-Up” your property management company or facilities management department than merely installing energy efficient appliances and light bulbs, purchasing “green energy” from your local utility company, and using green cleaning products!  If you’re serious about it, take a look at your landscape – it will look green, and save you greenbacks if you take the LandEconics™ approach to managing your “Living Assets”.

Management Suite

Graphic by Leo Reynolds from Flickr

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