Back in Buildings: Property Management in Nevada

Nevada is rapidly approaching the two-year mark since the start of the COVID-19 pandemic. Between government mandates, social distancing, supply delays and a nationwide staffing crisis, businesses in the Silver State have had to adapt and change. Many industries have been hit hard by these changes, including property management. But, in post-COVID Nevada, the industry is booming.

Nevada is growing and so is the property management industry. Despite COVID and the many challenges it has presented, Nevada has become a hot spot for business as more and more people call the state home.

“Nevada is a great place because it’s not taxed as heavily and so for businesses it’s a lot better,” said Jessica Jardine, partner at Commercial Project Management. “They want to be here, so they come here, they take places. The market is very high, so you’re paying a lot more per square foot for spaces. »

This competition for space is seen in both the industrial and office sectors, as many property managers report renting units even before the current tenant has left. Delays in new construction due to a shortage of staff and supplies have also limited the spaces available to tenants. Additionally, the demand for flexible working hours due to remote working during the pandemic is a contributing factor to the scarcity of small offices.

“We are seeing tenants operating their businesses requiring less space for employees,” noted David Jewkes, general manager of Avison Young. “It will be something that will be with us for the long term.”

While this unprecedented growth in Nevada bodes well for the property management industry, its sustainability is unknown. “It’s a little scary though,” Jardine commented. “When you grow quickly, there are so many changes and the price per square foot is so high. When will it stabilize? Nobody knows.”

Communication is key

In March 2020, Governor Sisolak issued a moratorium on emergency evictions for residential and commercial landlords. Commercially, the impact has been minimal.

“A very interesting observation we’ve made here in the Nevada market is that most of our regional or local tenants haven’t taken advantage of the moratorium on rent payments,” Jewkes said. “I’m sure there were a few, but certainly not many, in the portfolio that we have,” Jewkes said.

According to Meaghan Levy, director of property management services at Newmark, tenants who have been directly impacted by COVID have been able to work with their landlords to maintain their tenancies. Levy said, “For our properties, we’ve been able to negotiate with tenants to either lower the term rate or even forgive an absent term and just find a way to work together to get through it.”

Although the eviction moratorium imposed by Governor Sisolak has not had a significant impact on the commercial sector, the residential sector has still not recovered. As landlords faced the inability to pay their mortgages without collecting rent, property managers in the Home Owners Association (HOA) wondered how to keep communities free of collection activity.

“A lot of our councils have had to make very difficult decisions, as some landlords have, about maintaining their properties,” said Courtney Murphy, owner of Community Management Group. “They had to cut services. They had to make very difficult decisions about the needs of our developments. Many projects have been suspended. »

HOA property managers are now resuming collection efforts, but the backlog of community projects continues as Nevada faces a staffing crisis and a major shortage of supplies.

keep it clean

As many businesses have returned to their offices, maintaining clean and healthy workplaces has become a priority for property managers — and an expectation for tenants. While general cleanliness of common areas was the acceptable standard before, the bar is much higher in post-COVID Nevada.

Many property managers have increased their budgets to include installing touchless antibacterial dispensers in all buildings and providing face masks to incoming guests. Additionally, the frequency of janitorial services has increased dramatically and has proven costly for property managers.

“It’s a lot harder to find people and we pay them more,” Levy said. “For both landlords and tenants, our operating costs have actually increased. Even now, we see it with the fallout from individuals who chose not to return. Day porters and janitors took this time to retrain, re-equip and maybe do something different. It’s definitely a longer term impact for us. We are seeing our budgets increase by at least 20% in janitorial and, in some cases, up to 40%. It’s a staff driver that needs to be paid more so we can compete with hotels and casinos that have proactively raised their rates.

Not too high-tech

Advances in technology have had no significant effect on property and community management, apart from the implementation of sophisticated accounting and budgeting systems. While technology is at the heart of many industries, property and community management continues to rely heavily on basic communication between tenants and residents.

Property management is the core business,” Jewkes said. “It’s dealing with problems and making them go away. [Technology] wasn’t really impacted. It’s still very hands-on and people-centric.

The use of existing technology has increased dramatically during the pandemic as property and community managers seek to adhere to government guidelines regarding social distancing.

“We had to come up with different ideas to get around some of the new rules,” Murphy said. “For instance, [the rules] said only 50% could be in the pool at a time. We had to design a technology program where residents had to register to go to the pool before they could show up. It was not mandatory before. We’ve developed a program for them to go online, register to use the pool, and fill out waiver requests. »

Property managers have also begun to invest in and implement existing technology to limit physical contact with common building surfaces. Many property managers have installed sliding doors or keyless entry using tenant key fobs.

“Some of our buildings have been converted to an intercom system,” Jardine reported. “Especially in the multi-tenant building, each tenant had the ability to allow people into the building, so we didn’t have random customers or people walking around.” Many property managers have also invested in more sophisticated websites for communications with tenants, including paying rent and requesting repairs.

Is it safe?

At the height of the pandemic, property managers faced the challenge of organizing their buildings in a way that encouraged social distancing while remaining functional for tenants. Common areas may have been hit the hardest, with property managers limiting the number of people that can be in elevators, closing cubicles and sinks in bathrooms, and removing chairs in rest areas. Focusing on air quality and circulation in buildings has also become a priority.

“We increased our outdoor air intakes, in addition to having filters of the right size and changing them as recommended, depending on the load of your building and the manufacturer. We added UV lighting in some cases,” Levy said.

Although property managers engaged in a variety of building conversions to slow the spread of COVID, it was tenants who bore the primary responsibility for creating safe working environments based on their individual company protocols.

Jewkes explained: “For the most part it comes down to tenants, whether industrial or commercial. You will see on their doors “this is what you must do when you enter our space”. We have tenants who have vaccination mandates. They have all kinds of protocols they work with, but that’s not something we tell them to do. This is something we observe because they are tenants of spaces that we manage.

While many tenants simply closed their doors and worked from home, others tried to maintain a sense of normalcy by continuing to work in their offices. Some tenants have created split hours for employees, separate offices and enclosed common areas, and still others have made more extreme changes.

“We totally revamped our office space,” Murphy commented. “We made sure there was only one person in each area. We made sure everyone had masks, we made sure our whole office had new hand sanitizer stations everywhere. We made sure our break room was closed. We made sure everyone knew that only one person could be in the kitchen at a time. We have implemented new policies to make safety the number one priority.

As businesses become more familiar with operating during a pandemic and offices begin to reopen, tenants are starting to feel comfortable in the workplace again. Although the office environment has changed permanently, many are finding ways to integrate the important aspects of in-person work and culture into their companies. Through all of these issues and changes, for owners and tenants of commercial real estate, property management companies remain the first line of defense in creating safe workplaces.