Before diving into the why of the statement, it is important to understand what both these terms mean, their individual duties, combined efforts, and then the need for both of them throughout a real estate project.
During a real estate development project, each contributor to the entire process of researching, planning, designing, financing, developing, constructing, and operating has a different outlook on the project initiation, preparation of business case, design, construction proper, space utilisation, building operational and maintenance and business of the buildings (Chodasova 2004) as well a different role to play in the perfection of the project itself.
Each contributor requires specialized knowledge in their field as it can be highly lucrative, especially in commercial and residential estates, as they provide unique and valuable services in their own way. When a final product comes together, however, it is not through individual work but the multifaceted communication and work put together by all the pieces of this real estate puzzle. To ensure that no piece is damaged, forgotten, miscommunicated, uncoordinated, or fraudulent, owners of the project must take precautionary measures.
This is where the jobs of property management and facilities management come in. In the real estate market, these two terms are frequently used and, quite often, interchanged. The commonality lies in the fact that both of them are solely responsible for continuously refining and sustaining the standards of the property. The disparity and contrast begin in the minute roles each term plays in the grand scheme of a real estate development project.
Facilities management, in simple terms, are the instruments and systems provided that supports the operations, security, and permanence of the structure of the project. The position entails overseeing occupied and leased spaces and lease management, maintaining the business systems and making sure it runs smoothly, and capital project planning and management. It requires keeping the building secure and managing the infrastructure and equipment. It also entails energy management, occupancy and space management, employee and occupant experience, emergency management and business continuity, and real estate management. The two main aspects of Facility Management are Hard Facilities Management, which deals with the physical features such as wiring, plumbing, and temperature while Soft Facilities Management, which focuses on superintending the assignments handled by people such as security, and accounting etc.
The 11 core competencies of facility management, according to IFMA, are
- Occupancy and human factors
- Operations and maintenance
- Sustainability
- Facility information and technology management
- Risk management
- Communication
- Performance and quality
- Leadership and strategy
- Real estate
- Project management
- Finance and business
On the other hand, property management works directly under property owners and investors. While they do play a hand in ensuring the safety and security of the building, as facility managers do, the primary role they play is maintaining and securing profitability for the owner. Property management overseas is responsible for maintaining the entire building’s tasks that lease properties, market available property space, find reliable tenants, and act as a liaison between tenants and property owners. As CXRE, a Houston-based real estate company summarizes the job: “A property manager usually is assigned by an owner of a building that has multiple tenants and is generating revenue by leasing out sections of the building.”
Apart from operating the building to profit the owner, Property Management also covers paying bills, utilities, and taxes, collecting the rent, developing budgets, coordinating repairs, maintaining ground, and promoting occupancy.
Understanding the difference between the two, facility and property management, can be extremely helpful in managing real estate in a more organized, progressive manner. Accountability and communication helps individuals work in a timely, efficient manner and ensures that every piece is making the right decisions to fit the puzzle.
Choosing property and facilities management is important as all the aforementioned processes, expectancies, and tasks need to be handled with care. For a clearer understanding, some examples include cracks in windows and floors (Property Management) or shifting a company to a different section or floor (Facility Management). To keep the coils of this machine well oiled, an owner needs a property and facility management to handle the business, real estate, and building without any hindrances.
A solid piece of advice from a successful developer, Premier Choice International, is that do NOT cut your costs by trying to handle an entire project and managing it on your own. Take the time to research how much of your project needs the investment of Project Management and Facilities Management and invest in them accordingly.