A Leasing and Management Proposal for XXX Shopping Centers
(Note: The following proposal is a sample, which should be tailored to meet the requirements of the RFP)
A Leasing and Management Proposal for
{Name of Office Building}
{City, State}
Prepared for:
{Client Name}
{Contact information}
Prepared by:
{Preparer Name}
{Contact information}
{Date}
Table of Contents
{Name of Office Building}
I. Proposal Letter
II. Property Analysis
III. References
IV. Organizational Charts
V. Personnel Resumes
VI. Administrative Costs
VII. Management Agreement
VIII. Inspection Report
IX. Map & Photos
X. Corporate Information
PROPOSAL LETTER
{Client Name}
{Date}
{Page #}
{Date}
{Addressee contact information}
RE: Leasing and Management Proposal
{Name of Office Building #1}
{Name of Office Building #2}
Dear {Client Name}:
We want to thank you for allowing {Management Company} the opportunity to offer its services for the marketing, leasing and management of the two office buildings named above.
We are excited that we are being considered for this opportunity and feel that we can do an excellent job for you in getting these properties leased-up and maximizing their value.
We understand that you are considering changing the leasing and property management for these two properties. {Office Building #1} consists of 104,000 rentable square feet and presently is 13.5% vacant. {Office Building #2} also has 104,000 rentable square feet and is currently experiencing 12,250 square feet of vacancy. Both of these buildings were part of the original building boom experienced in the YYY area. They have benefited from the recent strengthening in the marketplace but have not achieved the lease-up that you had expected. You wish to improve the leasing program in order to achieve a higher occupancy in the very near future.
MARKET
During the last two years, the YYY office market has steadily strengthened with improving occupancy rates for nearly all of the properties. Buildings such as 111 Park Place enjoy 100% occupancy, however, there are situations such as 1000 Daley Center, which ABC foreclosed on, that are going to be a competitive factor that need to be dealt with. ABC putting this property on the market may undermine their ability to demonstrate competitiveness and stability for potential new tenants.
The YYY office market consists of approximately 3.8 million square feet including 43 office buildings and is currently experiencing an average vacancy of 627,000 square feet or approximately 16.4%. The YYY office market is relatively new in the Orlando area. It has been steadily maturing over the years even though it has experienced severe over building. The absorption has been consistent and steady; due to the desirable geographical location, the absorption will continue to be steady.
MARKETING STRATEGY
We would recommend continuation of the on-site leasing and management office as an essential part of the marketing strategy because of the presence of walk-in prospects in the marketplace. We would need the owner to provide the office furnished and equipped with a full-time secretary. We would provide the appropriate computer equipment to conduct the marketing program.
We would recommend an initial 30 days advertising campaign to announce the change in leasing and management to the community. We would also recommend the preparation of a single page color flyer for each property promoting each of the individual buildings. These brochures would be used in a direct mail campaign targeting local prominent tenants. We would also conduct a cold calling program to canvass downtown and suburban office buildings for tenants who will be relocating in the near future. We would recommend holding a brokers party on-site once the marketing plan is in full swing. It is our philosophy that brokers will lease space they have actually seen before they will show the space.
REFERENCES
The enclosed list of references and details is for your information. Some of these people are extremely busy and difficult to reach. If you do not reach them on the first try, I suggest leaving a message as to the purpose of your call and you will have a better chance of getting a call back.
PROPERTY MANAGEMENT
The Property Management Division of {Management Company} is a team of professionals dedicated to managing real estate for owners in order to maximize their financial return. During the last four years, the Management Division alone has leased an average of 460,000 square feet per year and that also averaged $24.7 million of gross rental income each year.
We are an Accredited Management Organization so designated by the Institute of Real estate Management and have the largest number of Certified Property Managers (CPMs) of any commercial real estate organization in {state}. The diversity of our experience includes the full spectrum from small office buildings and shopping centers to 600,000 square foot projects. We provide the basic property management services of leasing, purchasing, collections, negotiating for contract services and supplies, overseeing maintenance and repairs, supervising the premises and accounting to the property owner on the highest, professional level. Sample financial statements are enclosed herewith.
Our management personnel are organized around the team concept. When we initially take over the management of a new property, we bring in a team of usually three or four people consisting of leasing agents, property managers and engineering staff.
We will analyze the property from a property management standpoint to be sure that we know all of the benefits and advantages of tenants locating in it. The property will have an inspection in minute detail noting specific locations of certain building systems such as fire alarm and mechanical controls. An energy audit will be conducted by our engineering staff to how its electrical consumption compares to comparable buildings. The insurance coverage will be analyzed from the standpoint of the owner to ensure adequate protection is provided for property damage, liability, excess liability, rents and flood insurance. A budget will be prepared based on our experience at other buildings.
SALES AND LEASING
The Sales and Leasing Division of {Management Company} offers expertise which can make significant contributions to the successful leasing of these two properties. We have an inventory of national marketing data which includes contacts for many national, regional and local tenants. This inventory of information and personal contacts is of the utmost value to an owner because it gives us an immediate selection of potential tenants towards which we can direct our marketing and leasing efforts. We have thorough documentation of tenants in the market which has been the basis of targeted cold calling programs. We have excellent relations with other brokers in the market and would solicit their cooperation in leasing your properties.
{Management Company} is a member of The Office Network. The Office Network has grown into a very strong association of the largest and best commercial real estate firms around the country. The average partner firms of The Office Network have been in business for 40 years, and the broker/salesman with these firms has an average of 10 years experience in the real estate business. Last year, the business volume of member firms exceeded $5.7 billion in sales and leasing activity. We have just completed representing {XYZ client} for their requirement for 20,000 square feet in YYY area. We anticipate similar requirements in the future.
MARKETING/ADVERTISING
{Management Company} Marketing Services is a marketing and advertising agency specializing in commercial real estate with specific emphasis on office buildings and shopping centers. The Agency can design a marketing strategy based on and directed to an identified target market resulting in the best possible exposure of a property within budget and facility parameters.
Marketing a specific property can involve all or any combination of the following efforts predetermined by ownership and management: brochures, display and classified ads with carefully selected ad placement, flyers, on-site promotions, press releases, slide/video presentation and mass mailings.
{Management Company} Marketing Services is responsible for all creative work in-house and oversees coordination, printing, production and distribution of materials. Our desktop publishing capabilities allow us to reach the market fast and provide excellent flexibility. The Agency’s first priority is producing the highest quality work within budget and on time.
PROPOSAL
As you requested, we are addressing two different scenarios. The most economical scenario would be the leasing and management of both {Office Building #1} and {Office Building #2}. The alternative is to perform the leasing and management for only one of the two properties. Plan A below addresses both buildings, and Plan B addresses one of them. Enclosed you will find our analysis of the Administrative Expenses for both plans.
Plan A
Our management services would be available for managing both {Office Building #1} and {Office Building #2} upon the execution of either our Standard Management Agreement or your Standard Management Agreement acceptable to us providing a management commission 3% of the gross income collected per month with a $7,800 per month minimum for the first three months for each property and $6,200 per month minimum thereafter. The Property Manager’s salary and fringe benefits would be an expense of the property. We would willingly consider the existing property manager for these properties, for employment with {Management Company} to perform these services after we have reviewed his/her resume and background and had her go through our personnel testing.
The full services of our leasing personnel are available for the leasing of both of these properties under an agreement that will provide a 5% leasing commission of the gross rents for the first five years and 2.5% for the second five years. On leases exceeding five years, the commission will be as set forth above plus 1% of the amount over 10 years. The commission due on renewals of leases and options and expansions of existing tenants will be ½ of the leasing commission outlined above. Leasing commissions will be paid as follows: New leases are 50% upon execution of the lease by Landlord and Tenant and 50% upon occupancy by Tenant. Lease renewals at commencement date of renewal term; option space at date of occupancy or commencement of renewal payment.
Plan B
Under Plan B, we would provide the management services for either of the two properties, for a management commission of 4.5% of the gross income collected per month with a $4,800 per month minimum for the first three months and $3,500 per month minimum thereafter.
Our leasing services would be available upon the same conditions as Plan A except that the leasing commission for the first five years would be 6% of the gross rent, 4% for the second five years and 2.5% for any period over 10 years.
BONUS
Under either plan we would recommend an incentive to cooperating brokers of a bonus leasing commission of an additional 2% on the first five years which will compensate the cooperating broker with a 5% commission under either plan and {Management Company} would receive 2% under Plan A and3% under Plan B. The bonus commission could be discontinued at any time upon agreement between Landlord and Agent.
If you have any questions pertaining to this proposal, please feel free to call me.
Sincerely,
{Preparer Name and Title}
EXECUTIVE SUMMARY
{Client Name}
{Date}
{Page #}
EXECUTIVE SUMMARY
{OFFICE BUILDING #1} AND {OFFICE BUILDING #2)
MANAGEMENT FEE: 3% of gross rentals and other monies collected.
– Minimum for first three months $7,800 per month.
– Minimum thereafter $6,200 per month
Property Manager’s salary and bonuses plus benefits (estimated to be $25,000 + 17%) is an expense of the property.
LEASING COMMISSIONS:
– On month to month tenancies or leases up to and including 5 years: 5% of the amount of the lease agreement with a minimum charge of one month’s rental
– On leases exceeding 5 years and up to and including 10 years: the commission above set out, plus 2.5% of the amount over 5 years and up to and including 10 years.
– On leases exceeding 10 years: the commission above set out, plus 1% of amount over 10 years.
– On renewals of leases, expansions and options exercised and month to month tenancies of holdover tenants; one half of the leasing commission as provided herein above.
COOPERATING BROKER BONUS:
A cooperating broker shall receive half of the commission above plus an additional 2% of the lease amount during the first 5 years, excluding expansions, options and renewals.
SUPERVISOR FEE: 5% of actual costs of building improvements and tenant alterations.
EXECUTIVE SUMMARY
{OFFICE BUILDING #1} OR {OFFICE BUILDING #2}
MANAGEMENT FEE: 4.5% of gross rentals and other monies collected.
– Minimum for first three months $4,800 per month.
– Minimum thereafter $3,500 per month
LEASING COMMISSIONS:
– On month to month tenancies or leases up to and including 5 years: 6% of the amount of the lease agreement with a minimum charge of one month’s rental
– On leases exceeding 5 years and up to and including 10 years: the commission above set out, plus 4% of the amount over 5 years and up to and including 10 years.
– On leases exceeding 10 years: the commission above set out, plus 2.5% of amount over 10 years.
– On renewals of leases, expansions and options exercised and month to month tenancies of holdover tenants; one half of the leasing commission as provided herein above.
COOPERATING BROKER BONUS:
A cooperating broker shall receive half of the commission above plus an additional 2% of the lease amount during the first 5 years, excluding expansions, options and renewals.
SUPERVISOR FEE: 5% of actual costs of building improvements and tenant alterations.
REFERENCES
{Reference #1 – insert more references as needed}
The Client: BBB Insurance Company
Duration of Engagement: July 20XX through August 20XX
Assignment: The property was being foreclosed by {BBB company} and they needed a Receiver to handle the property. {Property manager} was appointed as the Receiver for the property and hired the {Management Company} to do the management and leasing. Once the property came out of receivership, we did a half million dollar renovation and implemented a major marketing program. We achieved 45% occupancy by April of 20XX at which time the property was sold.
Services: We provided receivership, property management, marketing, leasing, interior construction and brokerage for sale services.