After recession, commercial property management companies must shift focus toward continuity

With natural disasters on the rise, commercial real estate companies need continuity strategy.

In April 2009, RE Business Online published the article, "Managing Stress Toward a Positive Outcome," to serve as a guide for leaders in the leasing and commercial property management industries during the recession. It was considered a bleak time, and property managers were encouraged to face their day-to-day challenges with a renewed sense of customer service, communication and a commitment to all parties, including the property owners, tenants and vendors.

The main objective for managers, as set forth in the article, was stability. Foreclosures were happening everyday, and a steady, reliable stream of rent income was a prized asset, as cash flow was an issue for tenants as well as property owners. Everyone involved sought creative ways to reduce costs and maintain their properties.

The general message was one of re-evaluation.

But now the housing market is coming back to life. Mortgage rates are nearing all-time lows. Home prices are climbing. Construction starts are on the rise, with multifamily apartment buildings leading the pack. Of the commercial real estate brokerages that survived the recession, the market is looking good.

Not so fast
According to a recent IndustryEdge survey conducted by Travelers, 57 percent of commercial real estate owners and managers operate with a business continuity plan.

With the U.S. coming off of one of its most active and expensive years on record in regards to natural disasters and extreme weather conditions, it's a surprise that 43 percent of the real estate professionals who participated in the survey said they did not consider natural disasters to be an important issue affecting their businesses.

"The lack of preparation could be detrimental for real estate managers and owners," Deb Denker, real estate industry manager at Travelers, said. "To survive the increasing number and severity of disasters, real estate owners and managers need a strategic business continuity plan to help minimize downtime, organize a response and deploy the resources needed for a prompt recovery."

4 steps in developing a continuity plan
Step 1: Conduct a risk assessment.

Step 2: Conduct a business impact analysis.

Step 3: Develop prevention and mitigation strategies.

Step 4: Conduct exercises and test your plan.

According to Denker, even a small property loss can significantly threaten a business' vitality, and she understands how the rush of everyday operations can take priority. However, in the long term, businesses must be prepared for emergencies in order to survive, just as they did during the recession.

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