We’ve arrived at the fourth quarter of 2022 – a time when facility maintenance managers are finalizing their 2023 budgets for their facilities. A recent interview with the Property Manager of IFS client, Derrick Neil at Pan Am Tower, addressed the important factors he considers when compiling the budget for the property he manages.
The process starts with addressing the leasing assumptions within the building. What tenants are up for renewal, what tenants have additional space needs, what tenants might be planning a renovation – all of these are factors in forecasting the property’s income for the upcoming budget year. If there is a new tenant coming online, leasing commissions also need to be factored in.
Does the facility have any capital improvement needs that need to be considered? Obtaining vendor quotes and planning for the expenses associated with the work must be included in the budget.
These are typically ongoing maintenance and management-related expenses. They often involve third-party providers at the facility. This includes things like:
- HVAC maintenance services
- Labor costs – Pan Am has a full-time, onsite maintenance technician contracted through IFS
- Janitorial services
- Snow removal
- Carpet cleaning
- Window cleaning
Additional considerations include utility costs, building supply needs, and real estate taxes. Derrick utilizes a property management software tool to assist with the forecast and input process. He typically begins the process in August and finalizes in the fourth quarter of each calendar year. IFS can assist its property management clients with this process by providing input as needed.