If you were to track the rental rates and occupancy statistics of an active commercial real estate portfolio for retail, office and industrial properties for the past 15 years, some surprising trends would show up.

Several years back we noticed an interesting fact regarding the properties. These properties fall into two categories; Managed and Leased by the same company and Managed and leased by two different companies; What became evident was the properties that were both managed and leased by the same company were realizing a substantially higher occupancy rate then the properties that were being managed and leased by two different companies.

Below is the (2007 – Current) Vacancy Comparison:

April 2007 0.77% Vacant 1.75% Vacant.98%
April 2008 1.94% Vacant 3.49% Vacant 1.55%
April 2009 3.91% Vacant 6.31% Vacant 2.40%
April 2010 6.96% Vacant 8.94% Vacant 1.98%
April 2011 5.87% Vacant 8.80% Vacant 2.93%
June 2011 6.97% Vacant 8.94% Vacant 1.97%

We have long held that there is a huge benefit to owners when they utilize / combine both management and leasing services within the same company. There is a disconnect that occurs when the services are split between two service providers; even if the companies are highly skilled in their respective professions.

The statistics above demonstrate the benefit an investor can realize when the right team is in place to manage and lease their property. The next logical question is “why does it work better to have both services provided by the same company?” The answer is not as simple as it might seem.

We developed the philosophy of combined real estate services in answer to a problem that presented itself pretty much across the real estate industry. As the commercial real estate market began to turn around in the mid-1990′s, The market for commercial real estate investment got white hot, volume increased quickly. This coincided with a white hot leasing market; there simply weren’t enough qualified agents to effectively handle the volume.

Commercial leasing / investment sales agents were faced with a perplexing problem, where to spend their time, leasing a 1,000 square foot space or completing a multi-million dollar transaction.

You get the picture. Since a large portion of commercial real estate fee management accounts are multi-tenant properties, a solution that would serve our investors the best had to be found.

The answer started with requiring property managers to assist the listing agents with lease renewals. Think about it, the property manager knows the lease form, they know the lease spaces, they know what the owner of the property wants, they know the property budgets, and they know the existing tenant base better than anyone. The property manager speaks with the tenant on a regular basis. The tenant naturally becomes familiar and comfortable with the property manager. So, when it’s time to renew, who better to speak with the tenant than the property manager? But there is a problem, property managers, general speaking, lack market knowledge and refined negotiating skills.

That’s where the listing agent comes in; they have the market knowledge and refined negotiating skills. The company needs to have specialized listing agents. This concept freed up listing agents to do two things, focus on new leasing and investment sales. » Read more: How a Commercial Property Management Company Can Increase Your Profits