Colorado-Real-Estate-Journal_408465

July 2024 — Property Management Quarterly — Page 15 www.crej.com LEGISL ATION Don't settle for an outdated or ine cient space. Let us help you transform your space into a dynamic environment that re ects your brand and impresses your customers. 303.744.6106 jordyconstruction.com R E A D Y T O R E M O D E L ? . . I t’s an understatement to say that the world of commer- cial real estate and property management is facing, and will continue to face, extreme challenges under the current mar- ket conditions and climate. Much of this hardship can be directly and indirectly tied to public policy and politics, which obstruct and compli- cate an already challenging industry to navigate and manage effectively. Resourceful, adaptive and preemp- tive strategies are required to navi- gate and prevail in these choppy circumstances, but it can be done. More and more buildings are reverting to the hands of their lend- ers. Struggling occupancy and rent rates are starving buildings into receivership or short sales. Current interest rates and loan require- ments make it difficult for the eco- nomics to pencil, to refinance or to obtain necessary capital to make improvements to attract and retain tenants. Increased homelessness and the impact of the Colorado Right to Rest Act are creating opera- tional challenges with increased crime, building security, vandal- ism, and degradation of downtown and urban markets to the point of intimidating businesses away from leasing in these areas, thereby cre- ating more distressed, unsafe sce- narios for management companies to face and overcome daily. Ongoing labor and supply chain shortages delay critical services and property improvements that come with an inflated price tag and fractured quality in services and deliverables that require intense oversight and management to ensure quality. Changes to tax laws, such as Sen- ate Bill 24-22 and the repeal of the Gallagher Amend- ment in 2020, which ultimately increase taxes immediately and in the future on already distressed and struggling assets, will con- tinue indefinitely into the future and create a bumpy road ahead. Upcoming energy policies that focus on retrofitting commercial HVAC systems from gas to electric to comply with new clean energy laws sound encourag- ing at the surface level but come with idealistic (and unattainable, depending on who you talk to) and expensive conversion costs, and will very likely underperform on all levels, regardless of which side of political party lines you align with. Each one of these impediments is overwhelming on its own, but the situation is further complicated by the other compounding obstacles woven into this divisive political and economic climate we find our- selves in. Does anyone know a highly skilled, qualified and available prop- erty manager with amazing people and communication skills, an understanding of basic accounting, good common sense, and problem- solving skills who would like to unapologetically take on these chal- lenges for an average annual salary of $75,657 (thank you, Indeed.com) to take pristine care of cherished real estate assets? No? And there surfaces another obstacle we are facing as an industry. We are basi- cally handing special needs build- ings in critical condition over to underqualified, under-trained staff, or we are overextending and burn- ing out our seasoned managers, hoping for barely acceptable out- comes at best. Admittedly, some days it is hard not to feel overwhelmed and defeated with all the constraints and red tape we are faced with. But one admirable aspect of this industry is its resilience and adapt- ability. This resilience, this ability to bounce back, is what keeps us going. However, that doesn’t mean the challenges ahead are going to be easy to unravel. So, what are some possible next steps to over- come these complications? First and foremost, get involved in ground-level politics. That’s where true understanding and change can develop, grow and become the sincere foundation to build public policy and laws that are truly within the community's best interest and reflect the majority's resolve. Complacency is the can- cer that blocks understanding and growth in our society. Public policy has a reputation for repackaging its agenda-driven initiatives to appear innocent and noble but can come with some arguably poor conse- quences and results. For example, the recent tax initiatives may have led some to believe that they will reduce taxes, and initially they did. However, while they may reduce taxes in some capacity in the begin- ning, they eventually eliminate the checks and balances from previous laws and policies, and they likely will result in an increase in taxes without caps in place to keep cost control measures in check, result- ing in uncontrollable taxation in the future. The recent new clean energy laws intended to convert natural gas HVAC systems over to electric have a well-intended premise that most would support. However, the practi- cal and feasible implementation of these laws could fall short, leaving everyone frustrated due to the lack of successful execution of much- needed environmental change, with much higher conversation and operational costs to building own- ers, resulting in very little value added to either party in the end. There is sincere questioning if there is or could be enough required infrastructure in our power systems available to support converting the current natural gas HVAC systems to electric. If the infrastructure is not available to support these clean energy laws, why were they put in motion if they cannot truly be executed with success? If these good-in-theory but unrealistic changes are not feasible, one could argue they are half-baked and have no seat at the table. They made it into law prematurely and should be repealed to make room for more effective policies that will make Public policy, politics & property mgmt. collide Meghan Pritt Chief operating officer, Sessions Group LLC Please see Pritt, Page 23

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