Two of the largest costs associated with owning commercial real estate are taxes and insurance. While it is often a foregone conclusion that the costs are fairly fixed from year-to-year, Sperry Van Ness International Corporation (SVNIC) has introduced a product exclusively for property management clients, which has shown success in reducing owners’ insurance costs. Through their sister company, SVNIC has established a Master Insurance Program (MIP) which focuses on the buying power of a national portfolio of properties to increase savings.
Clients of SVN offices, ranging from individual investors to institutions, have utilized the buying power to drive down the cost of insurance on their properties. In the less than two years that the program has been in place, it has brought an average savings of over 31% to landlords. The smallest savings for a policy in this program was 20%, while the largest has been 51% of the previous annual policy premium. In most instances, the new policies have provided increased coverage on the property.
The MIP is just one of the programs and products that the SVN organization provides its property management clients. As a company that started by focusing on investment sales, our 1200+ Advisors and staff understand how to maximize the value of a property in order to get the highest return on their clients’ investment. This comes by reducing operating expenses, effectively increasing net operating income.
Any great property manager should be focused on increasing the net operating income for an owner. This program allows our offices to quickly accomplish that task while reducing the risk of owning and operating the asset. In some cases, the cost savings on the annual premium has proven to offset the property management fees. Property owners should not be shy in exploring this program for their assets. Even in situations where a tenant is responsible for the property taxes and insurance, being able to market a savings on an asset allows owners to compete in competitive and down markets. It says to tenants, “We care about controlling and reducing costs whenever possible.”