What do commercial property managers earn and how do they get paid? Is it a % of the amount the company earns?

In Property Management - Asked by Victor H. - Nov 10, 2012
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Trina L.
Owner/Investor
Laytonsville, MD

LOL That is a WIDE OPEN question. Shopping center managers typically get paid the most as retail space is one of the hardest spaces to lease successfully. In apartment buildings for example many are paid a % of the rents collected AND an additional leasing fee leasing each unit, then a fee to go out periodically and inspect the property and an additional fee for evictions After reading their agreement, you sometimes wonder what they do for the percentage of the rent. And you will wonder what incentive exists to prevent tenant turnover.I looked at one agreement, they wanted a leasing fee of one month's rent+25% of one month if the tenant stayed. I said no thank you.
Most if not all management fees paid are in some fashion based on gross rents collected. Never on the income of the company.
The salary of a commercial property manager working for a property management company earns $30 to $70 generally. You can look on payscale.com for more specific salary info beause it definitely varies based on location and experience.
Does that help?

Nov 12, 2012
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Matthew U.
Broker/Agent
San Diego, CA

This is a very broad question.
It is important to define the specific type, location, and class of property and what exactly is the manager's responsibilities. Therefore, the structure can very. It is a relationship established by a management contract. In different areas, the average going rate is different. I would suggest calling several agents/brokers who buy, sell, lease similar properties to the one that you are looking to get management for and asking them what the going rate is in the market for what you are doing. The more research you do in your specific building class and market the better.

Nov 13, 2012
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Jill B.
Broker/Agent
Little Rock, AR

As a commercial property manager myself, my experience has been that my company earns a set percentage of the total collected revenue (of any type including CAM reimbursements, late fees, etc). As the manager working for the mgmt company, I then negotiate my salary based on the city I live in and most importantly, in my opinion, my experience. A trained, experienced property manager makes a huge difference to an owner's bottom line and should be compensated well. On the other hand someone with limited experience may not contribute as much. For commercial management of retail or office buildings, I think a good base is $40,000 per year. Then anything above that is due to experience and special expertise. I believe that a manager of commercial property should be paid a base salary with leasing fees being a separate thing entirely. If there is no separate leasing agent for the property managed, the fee is usually piad as you would any other agent but is often split 50/50 with the house since the manager already earns a base salary. If there is a co-broker involved, a different split can be negotiated. If tenants continually move or seem hesitant to renew leases, that's sometimes a sign the manager isn't a good one. Quick response, concern for a tenant's issues, and knowledge of the physical aspects of a property are very important for commercial management. Hope this helps.

Nov 14, 2012
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connie b.
Morgantown, WV

% of sq. ft

Nov 29, 2012
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Tommy S.
Broker/Agent
State College, PA

I agree with the other posters on this question. A lot depends on the type of property, location and responsibilities of the manager. My background is more with Commercial Office/Industrial property management and we charge/pay anywhere from 5%-8% of the Gross Rental Income. Because we are partners in many of the buildings we manage we may stick to the lower end of this range and we don't usually charge a lease-up commission if we're a partner.
I would say if you do not have ownership in the property a 6%-8% management fee is reasonable and a reasonable commission for leasing the space if it is not already listed with a broker.
The interesting questions someone mentioned was how do you incentivise your manager to take good care of the tenants and make them want to stay? It obviously starts with hiring the right person even if you have to pay them a little more.

Dec 4, 2012
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