Top 3 Reasons To No Longer Defer Maintenance On Your Commercial Property

Deferred maintenance is the practice of postponing maintenance activities such as repairs on your commercial property. Reasons for this include cost saving or lack of attention to property management. The failure to perform needed repairs could lead to asset deterioration and ultimately asset impairment. The most common deferred maintenance issues we see with industrial properties are HVAC systems, roofing/leaks, landscaping, and asphalt/concrete upkeep. Below are the top 3 reasons to no longer defer maintenance:

1.     The cost of addressing the issue now is far less than allowing it to last longer and develop into a bigger issue

According to research completed by Rick Biedenweg, president of Pacific Partners Consulting Group and colleagues: "Every $1 deferred in maintenance costs $4 of capital renewal needs in the future."  Emergency repairs cost significantly more than maintenance repairs. Maintenance repairs can be planned outside of business hours, require less labor, and allow for more time to bid out the job for offers. But when a maintenance issue becomes an emergency, there is a lack of time and options, leaving only the most expensive labor to do the job under the time constraint.

2.     Deferred maintenance issues that disrupt the tenant’s business can end up costing you even more.

In certain scenarios, a deferred maintenance issue can develop into a bigger problem. If a deferred issue ends up disrupting the business operations of the tenant, the property owner risks having to compensate rent for the time lost or for lost business revenues if the issue is serious. Continuously maintaining the property prevents the risk of lost income in the future by continually maintaining the property.

Maintaining your property will give you a competitive advantage when the property is vacant or is coming up for lease renewal. Many of these maintenance issues can and should be paid for by the tenant, depending on how well you negotiated the lease on the front end.

 3.     Deferring maintenance until a new tenant arrives is a risky proposition

If a tenant leaves and an owner is forced to find a new tenant, there are many costs associated with this period where no income is generated. On top of this, having deferred maintenance that is needed to be taken care of before a tenant would want to occupy the property can add expenses to an already expensive period. When cash flow is disrupted, having one less expense to worry about can be a huge relief.

Overall, it is important for property owners to pay attention to issues as they arise and properly maintain their property to avoid long term issues. Our team is available to help you know about what is going on in the market and how your building compares to other properties in the submarket. Feel free to call (858)458-3361 or email me at ajize@voitco.com to speak further.