Budget Planning Guide for Commercial Real Estate Property Managers

Budget season is a critical time for commercial real estate (CRE) property managers. An effective budget aligns day-to-day operations with strategic goals, sets clear financial expectations, and helps avoid surprises. This guide provides best practices and step-by-step advice for planning and executing budgets for office properties, with notes on industrial and retail.

We cover both operating and capital budgets, forecasting techniques in today’s economic climate, communication with owners/asset managers, data-driven accuracy tips, common pitfalls to avoid, and how automation and AI tools can streamline the process. The focus is on U.S. office portfolios, with brief insights for industrial and retail assets.

Timeline and Key Milestones for Budget Season

Budget preparation typically kicks off mid - late summer, ideally with a clear timeline that has milestones to ensure nothing is rushed or overlooked. Below is a general budget season timeline for a calendar-year budget, which many U.S. property management teams follow.

Mid-Year Preparation (June – August): Begin gathering data and setting the stage for the budget. This is when property and asset managers start contacting vendors and reviewing leases to compile initial expense and income projections. Starting early (often in July) gives ample time for data gathering and avoids last-minute scrambling. Key tasks now include reviewing year-to-date performance, soliciting vendor cost estimates for the coming year, and noting any lease rollover or market changes that will affect income/expenses. (Tip: Many organizations initiate budgeting in the second half of the year (July/August) to forecast realistically for the upcoming year.)

Initial Draft Budget (September – Early October): Aim to complete a first full draft of the property’s operating and capital budget by early fall. This draft should include preliminary income projections (e.g. updated rent roll with rent steps, vacancy assumptions) and expense estimates (updated vendor contracts, tax and insurance estimates, etc.). Most firms require first drafts by September or October. Once the draft is compiled, internal reviews occur – property managers might meet with regional managers or portfolio controllers for a first pass check before sending it up the chain.

Owner/Asset Manager Review & Revisions (October): After the initial draft, expect iterative reviews with asset managers or owners. Meetings with ownership/asset management are held to align the budget with strategic priorities and make adjustments. During this phase, you’ll justify major expenses and capital projects, and possibly revise assumptions (for example, ownership might provide target guidelines on acceptable expense growth or required capital reserve levels). Open communication is key: incorporate feedback and be prepared with data to support your estimates.

Final Approval (November – Early December): By late fall, the budget should be nearing final form. Final approvals are generally completed by November or December so that all stakeholders sign off well before the new year. This allows time for any last-minute tweaks and ensures the property management team enters January with an approved plan. At this stage, the budget is often uploaded into financial systems and used to set the next years targets.

Roll-Out and Implementation (January): The new budget takes effect. Property managers use it as a financial roadmap for operations and reporting. It’s wise to communicate the final approved budget (or key points of it) to on-site staff so everyone understands the financial game plan (e.g. spending limits, new initiatives funded, occupancy targets). Also, prepare to explain budget-based Common Area Maintenance (CAM) charge estimates or rent increases to tenants as needed (especially in retail, where budgets determine tenant CAM bills). Once the year starts, tracking performance against the budget each month will be crucial – and any significant variances should be noted and explained, as this feedback loop improves future budgeting.

Milestone Tip: Set internal deadlines weeks ahead of owner deadlines. This provides a buffer for unforeseen delays and lets you review your work carefully. The period from mid-year to budget finalization is an intense “budget season” – but with a structured timeline and early start, you can avoid a last-minute crunch and reduce errors. Remember that during the summer months (June–August) it may be challenging to get timely responses from vendors or stakeholders (due to peak vacation time), so build in extra time for those critical inputs.

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Operating vs. Capital Budgets: Common Line Items and Categories

A property’s annual budget is typically split into two parts: the operating budget (for day-to-day income and expenses) and the capital budget (for long-term investments and improvements). It’s important to distinguish these, as they serve different purposes and are evaluated differently by owners. Many institutional owners use standardized category frameworks (such as BOMA’s chart of accounts for office buildings) to ensure consistency in how income and expenses are categorized. Below is an overview of typical line items in each category:

Operating Budget (OPEX): This covers the property’s expected income and operating expenses for the year – essentially the recurring revenues and costs to keep the property running on a daily basis. Common line items include:

Income: Rental income from base rents (per lease agreements), tenant reimbursements (expense recoveries such as CAM, taxes, insurance for NNN or base-year leases), parking or garage fees, storage or antenna rent, and other miscellaneous income (e.g. signage fees, vending machines). For instance, an office building’s income might primarily be base rent and operating expense reimbursements, while a multifamily property manager might include laundry or pet fees. (Ensure you account for any rent escalations or percentage rents in retail, and include assumptions for vacancy or credit loss.)

Fixed Expenses: Property taxes and assessments, property insurance premiums, and ground lease rent (if applicable) are generally fixed or contractual expenses. These do not vary with occupancy and must be paid regardless. Note when taxes are due (often semi-annual) and any expected changes (e.g. a reassessment). Insurance costs in the next year may rise due to market conditions – check with your insurer or broker for projections.

Variable Operating Expenses: Day-to-day operating costs that can fluctuate with usage or needs. Key categories include utilities (electricity, water/sewer, heating gas, etc.), repairs and maintenance (building repairs, HVAC maintenance contracts, plumbing/electrical fixes, supplies), janitorial and cleaning (including trash removal), landscaping/grounds upkeep, security (guard service or access systems), and administrative expenses (office supplies, admin staff, tenant events, etc.). Many of these correlate with occupancy or usage – for example, utilities and cleaning may decrease slightly with higher vacancy, but fixed schedules like landscaping remain constant. Managers often break these out in detail (e.g. separate line for elevator maintenance, fire/life safety contracts, etc.) to track specific costs.

Payroll and Labor: If the property has on-site personnel whose salaries are paid from the property’s budget (e.g. building engineers, maintenance techs, concierge or security staff directly employed, etc.), include their wages, benefits, taxes, and any planned raises. In some cases, payroll is handled by the management company centrally and charged as a fee or reimbursable expense – in which case it might appear under a management fee or contract line. Staffing costs can be significant for large office buildings and should be forecast with any known salary increases or needed new hires in mind.

Property Management Fees: The fee paid to the managing agent or property management firm, often calculated as a percentage of revenue or a fixed amount per the management agreement. Ensure the budget reflects the correct formula (and consider whether increased rents will raise the fee accordingly). In third-party management, this is an expense line; in an owner-managed scenario, there may not be an explicit fee, but corporate overhead could be allocated.

Marketing and Leasing: Any marketing expenses, advertising for vacancies, brochure printing, tenant retention events, or broker commissions for new leases (some owners treat commissions and tenant improvements as capital costs – clarify with ownership). For office properties, leasing commissions and tenant improvement allowances are typically part of the capital plan (not operating), but minor marketing or promotions (holiday events, lobby decorations, etc.) may be expensed.

Reserves/Contingency: Some budgets include an operating contingency or reserve – essentially a buffer for unexpected expenses (often a percentage of total OPEX). If not explicitly a line item, at least factor in some cushion so that a small variance won’t break the budget. (We discuss contingencies more under pitfalls.)

All these operating items roll up to determine Net Operating Income (NOI) (Income minus Operating Expenses). A well-prepared operating budget helps forecast cash flow and NOI, which owners and lenders closely scrutinize.

Capital Budget (CapEx): This covers major investments and one-time projects that improve or extend the life of the property, typically beyond the scope of daily operations. Capital expenditures are usually depreciated over time (rather than expensed immediately) and often require separate approval due to their impact on asset value and funding. Common capital budget categories include:

Building System Replacements: Big-ticket lifecycle items like roof replacement, HVAC system overhauls or chiller replacements, boiler upgrades, elevator modernizations, major electrical or plumbing infrastructure updates. For example, if the office tower’s chillers are 20 years old, the next years budget should include the planned replacement project cost, even if it will occur mid-year.

Renovations and Improvements: Significant property upgrades such as lobby or common area renovations, facade improvements, parking lot resurfacing, security system upgrades, energy efficiency projects (LED lighting retrofit, solar installations), or adding new amenities (a fitness center, conference facility, etc.). Each project should be listed with its expected cost and timing. Prioritize projects by need and strategic value – e.g. an upgrade that helps attract tenants or reduce future repairs might rank high.

Tenant Improvements (TI) and Leasing Costs: Funds set aside for build-outs of tenant spaces for new or renewing tenants, and leasing commissions payable to brokers. In many office (and retail) budgets, TIs and commissions are a substantial part of capital planning. They often depend on leasing activity assumptions – for instance, if 20,000 sq ft of leases expire in 2025, you might budget a TI allowance per sq ft and a commission for re-leasing that space (or for renewing if the lease requires a refurbishment). Even though TIs are tied to leasing, they are capital outlays since they improve the space long-term. Make sure to reference lease obligations: if a major tenant has a renewal option they exercise, the lease might stipulate a refurb or allowance.

Building Expansions or Acquisitions: Less common but if the owner plans to expand the building (an addition) or acquire adjoining property (e.g. to build a parking deck), these would be capital items. Typically, these would be part of a larger asset strategy and given by the asset manager.

Capital Reserves: Some owners require an annual allocation to a capital reserve fund – money set aside for future capital needs. For example, an institutional owner may ask that you budget $0.15 per square foot to reserves every year to build up funds for large future projects. This would appear in the capital budget (funded from NOI or a capital contribution). If your owner uses this practice, include it as a line item.

The capital budget ensures the property remains competitive and well-maintained in the long run. It’s wise to maintain a multi-year capital plan (5- or 10-year outlook) to anticipate projects coming down the line, even though the budget formally approves one year at a time. When planning 2025 projects, consider building condition reports, engineer recommendations, and any deferrals from 2024 that can’t be postponed further. Also coordinate with ownership on funding – will these projects be paid from operating cash flow, existing reserve accounts, or will ownership inject new capital? Large expenditures may need separate approval or financing considerations.

Avoid mixing OPEX and CAPEX: Keep operating and capital items separate in your planning and accounting. Don’t try to “hide” a capital improvement in the operating expenses – this can skew the NOI and also cause tax headaches (repairs vs. improvements have different tax treatments). As one real estate advisor notes, never mix CapEx and OpEx in your books; it confuses performance analysis and can lead to missed deductions or compliance issues. If you’re unsure whether an item should be capitalized or expensed (a common gray area in repairs vs. improvements), consult with the owner’s accounting policy or a CPA.

Institutional Budgeting Standards: Large office portfolios often adhere to industry-standard expense classifications. BOMA (Building Owners and Managers Association) publishes functional accounting guides for office and industrial that include a recommended chart of accounts. These help property managers budget and report line items on an “apples to apples” basis across properties and compare to industry benchmarks. Being familiar with such standards (e.g. what falls under “Repairs and Maintenance” vs “Janitorial” etc.) can be useful, especially if you manage multiple assets or report to institutional investors who will compare your budget to market averages.

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Industrial and Retail Property Budget Considerations

Most of the above principles apply across property types, but a few budgeting nuances differ for industrial and retail properties versus multi-tenant office:

Industrial: Many industrial properties are under triple-net (NNN) leases, meaning tenants pay most operating expenses (property taxes, insurance, maintenance) directly or via reimbursement. As a result, the landlord’s operating budget for a fully NNN-leased industrial building might be relatively small – mainly tracking that expenses = tenant reimbursements. However, the property manager must still budget those expenses to forecast cash flow and ensure tenants are billed correctly. Industrial budgets often emphasize capital planning (since landlords are typically responsible for structural elements like the roof, walls, parking lot). For example, a warehouse owner should budget for roof replacement every few decades and maybe large-scale HVAC or paving work, even if day-to-day repairs are minimal. Additionally, vacancy in industrial means the landlord temporarily covers utilities and maintenance for that space, so include a small vacancy allowance for expenses if you expect any downtime. Multi-tenant industrial parks will have common area expenses (e.g. shared driveways, lighting, security gates) – budget those just like an office CAM and allocate per lease terms. In short, industrial operating budgets are often simpler (fewer line items, lower service costs than an office), but lease reimbursement accuracy is crucial and capital projects can be large and lumpy.

Retail: Retail properties (like shopping centers or malls) involve CAM (Common Area Maintenance) budgets that are charged to tenants. Budgeting for retail is critical not only for the owner’s plan but also because tenants will see those numbers (through CAM charge estimates). Make sure to include all common area costs – landscaping, parking lot sweeping/repairs, security, mall marketing events, etc. – and categorize them per the lease definitions. Retail leases often have complex CAM structures, such as separate pools for different areas or expense caps for certain anchor tenants. Double-check each major tenant’s lease for any CAM cost exclusions or caps so you don’t overbill (owners may end up eating the difference if not budgeted). Inflation assumptions are particularly important in retail CAM, since tenants might question significant jumps. Providing a detailed CAM budget to tenants can help avoid disputes later. Also, consider occupancy changes – if a big tenant is expected to leave in mid-2025, your budget should reflect the lost base rent and any lower CAM recovery (and perhaps additional security or re-leasing costs to fill the space). Retail properties sometimes have percentage rent clauses (tenant pays extra rent based on sales over a threshold). If applicable, forecast those revenues conservatively, based on tenant sales trends. Overall, retail budgets must be very transparent and accurate, because CAM charges can account for up to ~30% of a retail tenant’s total occupancy cost and errors or surprises will strain landlord-tenant relationships. Many retail managers circulate CAM estimate letters to tenants ahead of the new year – using your budget – so accuracy and communication are key.

In summary, office budgets tend to have more extensive service lines (cleaning, utilities, tenant services) especially in full-service gross leases, whereas industrial focuses on minimal OPEX and major capital upkeep, and retail requires careful handling of CAM and potentially different lease accounting. But the fundamental goal is the same: to project income and expenses as realistically as possible so the owner knows what to expect and the property can be operated effectively.

Forecasting Expenses and Revenues

Forecasting is a blend of art and science – especially given the economic uncertainties heading into the new year. Property managers must use historical data, known future changes, and broader market trends to predict next year’s numbers. Below are key considerations and best practices for forecasting both expenses and revenues in a updated budget:

Use Past Performance as a Baseline: Start with a thorough review of last year’s actuals vs. budget. This shows where your previous assumptions were off and why. Identify areas of consistent variance – did utilities regularly exceed budget? Was turnover higher than expected, driving up repair costs? Analyzing 2024 (and 2023) actual expenses and income provides a reality check for 2025. As one guide suggests, review where funds were allocated vs. actually spent, and adjust categories based on past trends (not just a flat increase). For example, if 2024 had an unusual one-time repair (a burst pipe) that won’t repeat, you might not carry that cost forward – but if you see a steady rise in maintenance expenses each year, budget an increase, not last year’s number. Looking at occupancy trends over the year is also useful – note any seasonal vacancy patterns or leasing velocity changes, and incorporate those into rent projections. In short, don’t copy-paste last year’s budget (a common mistake) without scrutiny – learn from it. Past performance is the starting point, then layer on the changes expected for 2025.

Factor in Inflation and Cost Escalations: Inflation has been a big factor in recent years, and while it may moderate, you should still adjust for inflationary pressure on various expenses. Research general inflation forecasts and specific cost drivers: for instance, if CPI is expected around, say, 3% in 2025, you might inflate many supply and service costs by that amount. However, different expenses experience different inflation. Insurance might jump much more (many insurers have been raising rates >10% recently due to higher claims costs), whereas some utility rates might be locked or rising modestly. Labor costs have been rising – if janitorial or security contracts are up for renewal, anticipate increased bids due to wage growth. A good strategy is to request updated pricing from vendors mid-year. Reach out to major service providers (landscaping, cleaning, etc.) and ask if they expect to raise prices, or solicit quotes from competitors if needed. If vendors are unresponsive by budget time, build in an increase anyway. For example, some property managers send a standard form to vendors asking if they anticipate a rate increase for next year; if a vendor doesn’t respond, the manager might automatically assume a 3–5% increase to that contract cost, depending on inflation. It’s better to budget slightly high than to be caught short. Revise cost assumptions line by line – materials (paint, HVAC parts) might be subject to commodity price changes, utilities might be affected by fuel costs – use the best info available (city announcements, contractor insights, etc.).

For rent projections, consider inflation in the context of market rental trends. Are market rents in your area still growing, flat, or declining? Perform a mini market survey if possible – this helps in setting rents for any vacant space or renewals. If the market is softening, you might budget longer downtime or more concessions for new leases (lowering net income). Conversely, in a strong market you might justify aggressive rent growth. Align your rent growth assumptions with local and regional trends (rising or falling rents, demand, new supply). Also incorporate known lease escalations: many office leases have 2-3% annual bumps or tied to CPI – include those per each lease schedule.

Account for Interest Rates and the Economic Climate: Interest rates indirectly affect property operations and directly affect any budgets that include financing costs. As of 2024, interest rates have been high, and forecasts for 2025 suggest they may gradually come down but remain above pre-2022 levels. If your property’s budget needs to include debt service (in some cases, a property manager might also project NOI minus debt = cash flow to owner), consider using the interest rate that will apply in 2025 (especially if the loan is variable or due for refinancing). High interest rates could mean owners want to trim costs or boost NOI to maintain debt coverage ratios. Beyond that, the economic environment (GDP growth, employment in your market) can influence tenant behavior. Higher interest rates and economic uncertainty might slow tenants’ expansion plans or make them cost-conscious, affecting occupancy and collections. Keep an eye on macro indicators: for example, if economists predict a mild recession in mid-2025, you might budget a slightly higher vacancy or bad debt reserve as a caution. In general, stay informed about interest rate trends, local economic health, and real estate market dynamics, and factor those into your budget planning assumptions. This could mean budgeting a longer lease-up period for new vacancies or being conservative on ancillary income.

Project Occupancy and Tenant Turnover Realistically: Revenue depends heavily on occupancy levels and lease terms. Make a lease-by-lease plan for the year:

Identify all leases expiring in 2025. For each, decide: Will the tenant likely renew or move out? Consult your leasing team or the tenants’ expressed intentions. If they renew, at what rent (market rate or per an option in the lease)? If move-out is likely, budget for downtime (vacant months) and re-leasing. For example, you might assume it takes 6 months to backfill a 20,000 sq ft office suite – thus 50% vacancy on that space for the year, plus a leasing commission and TI allowance (in capital) to get a new tenant.

Incorporate rent abatements or free rent: if a new lease starting in July 2025 comes with 3 months free rent, the effective revenue for that space is lower for the year. These must be reflected in the income line.

Tenant turnover costs: beyond lost rent, turnover can increase expenses: cleaning and minor repairs of vacated suites (sometimes called make-ready or turn costs), marketing the space, and possibly higher utilities if you light and cool an empty space more during showings or construction. These can be small line items individually, but if you expect several turnovers, consider adding a budget line for “turn costs” or including extra in repairs specifically for space turnover work.

Occupancy goals: On the flip side, if you have vacant space currently, do you plan to lease it in 2025? Work with your leasing brokers to estimate likely lease-up (how many square feet, at what rent, and when). It may be safer to assume a conservative occupancy improvement unless deals are already in the pipeline. Set an occupancy target and ensure your rent roll projection reflects that (e.g. aiming to go from 88% to 92% leased by year-end). Tie any associated costs – like tenant improvement capital or increased utilities for occupied space – to that assumption. Owners will appreciate a clear explanation of how you forecasted rental income: e.g., “Budget assumes leasing 10,000 sf at $30/sf starting July 1 (half-year income), with $300k TI and 6% commission in capital budget.”

Don’t forget potential downsizes or subleases. If any existing tenants have given indications they might give back space or cease operations, it might affect your income (and expenses) mid-year.

By carefully forecasting occupancy, you essentially create a 2025 rent roll – the foundation of the revenue budget. Many property management firms use rent roll forecasting tools or spreadsheets that list each lease and apply the 2025 terms (new rents, expirations, etc.) to derive total rent revenue. Accuracy here is paramount; it answers the million-dollar question: “How much money is the building going to make?”.

Plan for Seasonal and Timing Variations: A common mistake in budgeting is to annualize everything evenly, which can obscure cash flow realities. Instead, align expenses and income to when they will actually occur (budget by month or quarter):

Seasonal expenses: Account for higher heating costs in winter and higher electricity (A/C) in summer, seasonal landscaping or snow removal (budget snow plowing in winter months, landscaping in growing season), and other seasonal spikes. If your market is warm, cooling costs might surge mid-year; if in a snow belt, snow removal could blow your budget in a heavy winter if you only spread it evenly. Look at the pattern from prior years and budget accordingly (maybe have a “snow removal” line with a realistic amount for winter months based on a median snowfall year).

One-time payments: Property taxes and insurance are often paid in large installments (e.g. taxes due in July and December). Make sure your budget (and cash flow planning) acknowledges those due dates to avoid shortfalls. The same goes for any big annual fees or contracts paid upfront.

Lease escalation timing: If a major tenant’s rent steps up on June 1, 2025, the budget should show increased rent from June onward (not for the full year). Similarly, if salaries or contract rate increases kick in mid-year, reflect those in the month they occur. This “aligning anticipated changes in the month they occur” improves budget accuracy. Many budgeting software allow monthly detail – use it to prevent underestimating costs in certain months.

Stagger capital projects: If you plan a big capital project in August, the cash outflow will occur then, not uniformly through the year. This may not affect the expense budget if it’s capital (separate), but it affects cash planning and potentially owner funding needs. So note the timing in your capital plan.

Build in Contingencies: The future is uncertain – so wise managers include contingencies for unplanned events. This could be a formal “Contingency” line (say, 5% of operating expenses) or just a general practice of rounding up expenses. Having a cushion for unforeseen costs (like an unexpected legal expense, a sudden repair, or an increase in janitorial needs if a new health regulation hits) can save you from blowing the budget. Also consider “economic vacancy” – even if you expect 95% occupancy, allow a percentage of income for bad debt or tenants defaulting, especially if economic times are uncertain. Contingency is not meant to be a slush fund you freely spend – think of it as insurance within your budget. If unused, it shows up as savings. If something goes wrong, you have some coverage. Owners generally appreciate prudence here, as long as the contingency isn’t exorbitant. One rule of thumb: The more volatile the line item, the more cushion it might need (for example, snow removal in a volatile climate might warrant extra reserve).

In summary, forecasting for 2025 means blending historical trends with forward-looking adjustments for inflation, market conditions (interest rates, etc.), and known property-specific changes (leases, projects, etc.). Document your assumptions for each major item – this will be invaluable when explaining the budget to ownership and will serve as a reference if 2025 throws curveballs (you can recall why you budgeted the way you did).

Leveraging Past Data, Vendor Contracts, and Lease Obligations for Accuracy

Accurate budgets don’t come from guesswork – they result from meticulous use of data and documentation. In 2025 planning, property managers should ground their budgets in hard data as much as possible. Three primary sources of truth are historical performance data, vendor agreements, and lease documents. Here’s how to use each:

Prior-Year Financial Data (Actuals and Trends): As noted, start with your 2024 actual income and expenses and the variances from the 2024 budget. This financial history is gold for identifying patterns:

Variance Analysis: Break down where 2024 differed from plan. If utilities were 10% over budget, was it due to rate hikes or higher usage? If repairs were under budget, was it luck (fewer breakdowns) or because some projects got deferred? Understanding the cause behind numbers lets you decide whether to replicate, increase, or decrease that line for 2025. One best practice is to write a brief budget narrative or notes for each line, referencing last year: e.g., “2024 landscaping came in $5k under budget due to a contract change – 2025 contract fixed at $X, budgeting accordingly.”

Trends: Use multiple years if available. Perhaps property taxes have risen ~2% annually; you might expect a similar uptick (unless a major value reassessment is coming). Or you might see that each year you needed to transfer money from another account to cover a particular under-budgeted item – a clear sign to increase that item now. Some accounting software or consultants can provide benchmarking – how your expense ratios compare to similar buildings. If your building’s cleaning costs are way above peers, it might indicate room to negotiate or adjust scope (or justify why it’s higher quality service). Conversely, if you’ve been spending very little on preventive maintenance, data might show a rising trend in repair costs that could be curtailed by more proactive maintenance spend (as an example).

Actual vs. budget tracking: If you’ve maintained a practice of quarterly or monthly budget vs. actual reviews, use those insights now. For instance, if by Q3 2024 you were already 90% spent on HVAC repairs, you knew to plan higher next year. One expert emphasizes that tracking budget against actuals regularly and analyzing variances is crucial – without that feedback loop, even a sophisticated budget is just a static document. So carry forward what you learned each quarter into the new budget.

Vendor Contracts and Service Agreements: Your expenses often tie directly to vendor contracts – so review every major contract or quote on file:

Contracted Rates: Identify which services are under contract for 2025 (and their terms). For example, if you signed a two-year janitorial contract in mid-2024 with fixed pricing, you know exactly what to budget for cleaning. Or a landscaping contract might have a clause, “annual increase tied to CPI or 3%, whichever is higher” – apply that formula. By using contract rates, you greatly improve accuracy and avoid “ballpark” estimates.

Contract Expirations: If a contract ends before or during 2025, you’ll need to estimate new pricing. Engage vendors early: ask them if they will hold current pricing or expect changes. Go to bid if needed to get realistic numbers. Vendors might not give a firm quote six months out, but they can often give a range (“we expect an increase of ~5% next year due to labor costs”). Use that info. Also, budget any contract re-tendering costs if applicable (some owners might hire a consultant to bid out a large contract – usually not significant, but note if so).

Scope Changes: Consider if any scope of work will change in 2025. Perhaps you plan to add a new security post or increase cleaning frequency (post-COVID cleaning standards might still be elevated). If so, incorporate the cost. Alternatively, if you intend to cut back (e.g. switching from full-time day porter to part-time), reflect those savings – but be sure it’s agreed upon operationally.

Bulk Purchasing and Utilities: For utilities, check if there are rate changes planned by providers or if you can lock in rates. Some large portfolios purchase energy in bulk or use hedges – if you have such info from asset management, use the contracted energy rate instead of a guess. The same goes for any bulk procurement (like if corporate negotiated a portfolio-wide elevator maintenance rate).

Vendor Input Process: As part of your budgeting SOP, you might send a “budget letter” to key vendors asking for next year’s cost estimate by a certain date. This proactive communication can save a lot of guesswork. As mentioned earlier, if vendors don’t reply, applying an inflationary increase is common – and keep records of these outreach attempts, as explaining to owners that “we contacted all major vendors; those who didn’t respond were budgeted at +4%” demonstrates due diligence.

By grounding your expense budget in actual contract terms and vendor estimates, you reduce the uncertainty and also have backup documentation to defend your numbers (useful if an owner questions, “why is elevator maintenance going up 8%?” – you can show the vendor letter citing increased costs).

Lease Agreements and Tenant Obligations: Leases drive your revenue and also dictate many expense responsibilities. A comprehensive budget process will involve a lease audit or review for any clauses impacting financials:

Rent Steps and Free Rent: Go lease by lease and mark down any scheduled rent increases in 2025. Many office leases have annual fixed bumps (e.g. $1.00 per sq ft per year or 3% annually every January). These should be built into the rent roll forecast. If a tenant has a free rent period in 2025 (perhaps from a lease commencement or an extension deal), include that (zero rent for those months for that tenant).

Expense Recoveries: Carefully review the operating expense clause of each lease, especially in multi-tenant office and retail. Determine for each tenant: are they on a gross lease (landlord pays all operating expenses, possibly with a base year for increases) or net lease (tenant pays their share of expenses)? If gross with a base year, you’ll need to calculate the expense stop – i.e. the 2025 budgeted expenses minus the base year expenses = amount billable to tenant. Make sure you have the correct base year figures. If any tenant has an expense cap (e.g. their share of CAM can’t increase more than 5% year-over-year), incorporate that limitation – if your expenses are rising more, the amount over the cap becomes unrecoverable (and effectively an owner expense). For retail, some anchors might exclude certain CAM items (e.g. they don’t pay for security costs) – exclude those from their reimbursement calculation and ensure the shortfall is budgeted as a non-reimbursable expense to the owner. Using a recovery worksheet can help: list total expenses by category, which ones are recoverable, and any lease-specific limits to compute total tenant reimbursement income. This often-neglected step is vital for an accurate net income projection. Modern AI-driven tools or lease abstraction software can help by quickly pulling these lease terms so you don’t miss an odd clause. For example, an AI lease abstraction might flag that Tenant A has a gross lease, Tenant B is NNN, Tenant C has a cap on janitorial increases, etc., allowing you to seamlessly calculate recoveries.

Lease Covenants Impacting Expenses: Some leases might require the landlord to do certain projects or maintain certain standards. For instance, a lease might say the landlord must repaint common areas every 5 years or resurface the parking lot in year 3 of the term. If any such obligations are due in 2025, they need to be in the budget (likely capital budget for a parking lot resurface, or operating for a repaint depending on capitalization policy). Failing to budget these could lead to scrambling for funds later.

Termination or Expansion Options: Be aware of any leases where the tenant has a termination option or expansion right in 2025. If a big tenant could terminate their lease mid-2025 (and you suspect they might exercise it), you may want to present two budget scenarios: one with them staying (full-year income) and one with them leaving (loss of income after their break point, plus perhaps a termination fee income if applicable, and then any costs to secure a new tenant). Similarly, if a tenant has a right to expand into vacant space and you think they will, factor the additional rent (and TI costs) into the plan.

Rent collection and bad debts: Use historical payment patterns of tenants to judge if you need a bad debt reserve. If one tenant has been chronically late or is in financial trouble, an owner might appreciate a conservative approach of reserving some of their rent as uncollectible (unless you’re confident in enforcement).

By leveraging lease data, you ensure the revenue side is as contractually accurate as possible and that any recoverable expenses are correctly calculated. The goal is to hit as close to the mark as you can so that year-end reconciliations don’t reveal large variances that require explaining to tenants or owners. In fact, one of the headaches for property managers is justifying to tenants why actual CAM expenses exceeded budget estimates (resulting in an unexpected bill). By budgeting with precise lease terms in mind, you can minimize those surprises and foster better tenant relationships through more predictable expense passthroughs.

Data Accuracy Tools: Consider using specialized software or AI tools to aid in data extraction:

• Many property management accounting systems (Yardi, MRI, etc.) have budgeting modules that automatically pull last year’s actuals and allow you to apply percentage changes or insert known adjustments. Utilizing those features can save time and reduce manual errors.

• AI lease abstraction platforms (like Prophia or others) can rapidly summarize lease clauses relevant to budgeting, ensuring you don’t overlook a tricky lease detail. For example, AI can verify all recoverable expense clauses and help you get as close to “0 variance” on your recoveries as humanly possible by making sure every exclusion or base year is accounted for.

• Rent roll automation: Some tools can generate a future rent roll with all escalations and abatements with a click. If you have access to that, it’s extremely helpful for revenue budgeting.

In essence, let data drive your budget. Use last year’s numbers as a reality check, current contracts as a basis for costs, and leases as the blueprint for income and recoveries. This data-driven approach will make your budget both accurate and defensible, giving owners confidence in the numbers.

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Communication Strategies with Ownership and Asset Managers

Creating a solid budget is only part of the job – you also need to communicate the budget effectively to those who must approve and ultimately rely on it: the property owner or asset manager. Successful communication ensures alignment on goals, fosters trust, and can turn the budgeting exercise into a strategic planning session rather than a contentious negotiation. Here are strategies to communicate and collaborate with ownership/asset management during the budgeting process:

Engage Early and Establish Expectations: Don’t wait until you’ve prepared a full budget to involve the owner or asset manager. Early in the process (even as early as late Q2 or Q3), have a kickoff conversation. Ask if ownership has particular goals or concerns for 2025. For example, the asset manager might say “Our priority is to reduce operating expenses by 5%” or “Ownership is considering selling in 2025, so focus on maximizing NOI and only absolutely necessary capital items.” These strategic directions will shape your approach. Also ask if there are any assumption guidelines: some institutional owners provide parameters like “assume 3% inflation for expenses except insurance at 10%, and no rent growth beyond existing leases.” Knowing these upfront helps tailor your draft to what they expect, avoiding major rewrites. Establish the timeline for owner review (when they want first draft, how much time they need, etc.) so everyone is on the same page.

Provide a Clear and Concise Budget Presentation: When delivering the draft budget to ownership, accompany it with a narrative or executive summary. This write-up should highlight key points such as:

Use Data to Support Your Decisions: Owners and asset managers are more likely to accept budget items that are backed by data or benchmarks. If you’re asking for a 10% increase in the repairs budget, be ready to show that maintenance requests increased 15% this year or vendor X raised prices by 10%. If you propose a capital project, perhaps show before-and-after photos of a deteriorating element or references to industry standards (e.g. roofs last 20 years on average, and we are at year 25). Quantify the ROI of investments where possible: “This $50,000 LED lighting upgrade will reduce electric costs by $15,000/year and pay back in ~3 years.” When owners see you’ve done your homework, they build trust in your competence and recommendations.

Communicate in the Owner’s Language: There is sometimes a perspective gap between property managers (focused on operations) and asset managers or owners (focused on investment returns and strategy). Bridge this by framing parts of the discussion in terms they care about:

Foster a Collaborative Relationship: Remember that property management and asset management are symbiotic roles – each relies on the other. Approach the budget review as a collaboration to achieve the owner’s objectives. Be open to feedback and demonstrate that you’re flexible: if the owner asks you to cut $50,000 from OpEx, come prepared with suggestions of lower-impact cuts (or explain trade-offs: “We can defer the exterior paint to 2026 to save $50k, but the building’s appearance might suffer a bit in the interim”). If an asset manager suggests something that doesn’t make sense operationally, respectfully explain your professional view. For example, if they push to under-budget maintenance, caution that it could lead to more expensive failures – offer alternatives or compromises. This two-way trust is critical. Asset managers depend on your accurate, on-the-ground information to guide financial strategy, and you depend on their guidance to know the bigger picture. Effective communication ensures the final budget is one you both can stand behind.

Regular Financial Updates and Transparency: Don’t make budgeting the only time you talk numbers with the owner. Throughout the year (and especially as you approach year-end), keep the owner informed of performance and any budget deviations. If you’re overrunning a category in 2024, give them a heads-up and explain how you’ll adjust in 2025. Owners hate surprises, especially financial ones. By being transparent, you build credibility. Some property managers provide a mid-year budget reforecast or at least a status update – owners appreciate this proactive approach. Also, once the 2025 budget is approved, continue communicating: for example, if mid-2025 some assumptions change (maybe a tenant decided not to renew after all, hitting income), let the asset manager know along with how you plan to mitigate it. This ongoing communication on financial matters strengthens owner relationships and makes next year’s budget process smoother because there’s confidence in your reporting.

Use Technology for Clarity: Consider presenting the budget using visuals or dashboards if possible. A spreadsheet full of numbers is fine for the record, but a slide deck with charts (pie chart of expense breakdown, trend line of NOI, etc.) or an executive summary page can communicate key points quickly. Owners who manage multiple assets might prefer a standardized format – ask if they have a template or particular format for budget submissions (some institutional owners require you to fill data into their system or forms). Complying with their format shows professionalism and makes their job easier.

Document Owner Decisions: When owners or asset managers make specific calls (e.g., “remove that $100k capital project from the budget”), document that. You might include a note in the budget package or an email confirmation. This isn’t about “covering yourself” (though it does that); it’s about having a record so that six months later if someone asks “why didn’t we budget for X?”, you can trace back that it was a conscious decision. It also helps ensure mutual understanding – you heard their instruction and executed it.

In essence, effective communication turns the budget into a strategic tool rather than a contentious checkbox. By treating the owner/asset manager as a partner – providing them clarity, data-backed reasoning, and alignment with their goals – you’ll likely gain their trust and approval with fewer rounds of back-and-forth. Regular, consistent communication on financial performance (not just at budget time) further solidifies this partnership. Remember, a well-communicated budget enhances your credibility as a manager and sets the stage for a smoother year ahead, because everyone agrees on the plan and understands the “why” behind the numbers.

Tips to Avoid Common Budget Pitfalls

Even seasoned property managers can fall prey to budgeting pitfalls that undermine the effectiveness of a budget. Here are some common budgeting mistakes in CRE management and how to avoid them:

Starting Late or Rushing the Process: A last-minute budget is more likely to have errors or unrealistic figures. Avoid the temptation to put off budgeting because it seems daunting. Starting early (see timeline above) gives you time to gather accurate data and think things through. Rushed budgets often rely on rough guesses, and stakeholders can tell. Begin planning early and stick to a schedule – this way you’re not scrambling in October to fill gaps.

Copy-Pasting Last Year’s Budget without Analysis: Simply taking last year’s numbers and adding a percentage across the board is a recipe for problems. This can overlook changes in operations or mask structural issues. For instance, maybe last year’s budget underfunded repairs and you went over – if you copy it again, you’ll go over again. As one source bluntly put it, “Simply copying and pasting last year’s budget won’t cut it.” Use last year’s budget as a reference, but always validate each line against actuals and upcoming changes. Each category should be built “from the ground up” where possible, using current info (zero-based budgeting approach for key items).

Underestimating Expenses (or Overly Optimistic Revenue): A very common pitfall is to make the numbers look good on paper by trimming “fat” unrealistically or assuming best-case scenarios on income. This can lead to budget shortfalls and owner frustration later. Examples: under-budgeting winter utilities assuming a mild season, or assuming 100% occupancy when historically you’ve had 5% vacancy. Be realistic or slightly conservative in estimates. It’s better to come in under budget on expenses than to blow past it because you wished costs away. Likewise, don’t count on uncertain new income (like that speculative new lease) until it’s reasonably firm. Overly rosy budgets might pass owner approval initially but will damage your credibility when not met.

Forgetting a Contingency/Reserve: Not allocating anything for unexpected events means any surprise will bust the budget. As discussed, include some contingency funds or flexibility. Failing to plan for the unexpected – such as an emergency repair or a tenant default – is a pitfall that can turn into a crisis. Even a small reserve line can buffer this. Similarly, neglecting capital reserves for future big expenses can leave the owner unprepared for large outlays. Always have a plan for the “what-ifs.”

Mixing Operational and Capital Items: Treating a capital improvement as an operating expense (or vice versa) can cause accounting issues and muddy the financial picture. For example, if you include a $200k roof replacement in operating expenses, it will inflate your OPEX and distort the NOI (and owners may balk at the high “expenses” without realizing it’s a one-time item). Conversely, expensing something that should be capital could violate accounting rules or miss depreciation benefits. Know the difference and keep them separate. If you’re unsure, ask the asset manager or owner’s accountant for guidance on borderline items.

Ignoring Seasonality and Timing: We touched on this in forecasting – a big pitfall is not aligning the budget with when costs hit. If you spread everything evenly, you might appear fine on paper but run out of cash for a large bill. Also, some managers forget about non-uniform costs (like an insurance payment once a year) and then mid-year find their budget tracking is off. Avoid lump-sum surprises by planning for them explicitly.

Not Reviewing Vendor Contracts or Going to Market: Assuming costs will remain the same without checking the market can be an issue. Perhaps you budgeted the same cleaning cost, not realizing the contract is up for renewal and the vendor plans a 10% hike. Or you never sought competitive bids for a service that could be cheaper. Regularly review contracts and market rates – maybe you can actually reduce a line item through a new vendor or negotiation (savings which you can reflect in the budget). The pitfall is complacency – just reusing last year’s cost without question.

Overlooking Insurance and Tax Increases: Property taxes and insurance premiums are often two of the biggest line items, and they can jump significantly year to year. A mistake is to assume they’ll be roughly the same. Many regions have seen property insurance premiums soar recently (due to natural disasters, inflation in construction costs, etc.). Check with your insurance broker well in advance for expected 2025 rates. Similarly, if your locale reassesses property values on a cycle and 2025 is a reassessment year, prepare for a possible tax change. Not accounting for these can leave a huge gap. Tip: Review your property’s tax assessment notice or have a tax consultant estimate it, and consider appealing if it’s high – but still budget conservatively in case. Also, ensure you budget for insurance deductibles or uninsured risks if relevant (some owners maintain a deductible reserve).

No Buffer for Regulatory or Compliance Costs: Laws and regulations change, and sometimes new compliance requirements (e.g. local energy benchmarking upgrades, ADA improvements, safety inspections) can impose costs. A pitfall is ignoring the regulatory environment. Keep an ear out for any upcoming laws that might require spending – perhaps the city will mandate building energy tune-ups next year. If you know of anything, budget for it or at least mention it as a possibility to ownership. Regulatory costs often catch managers by surprise; being proactive avoids last-minute scrambles for funds.

Setting Unattainable Goals (Budget as a Wish List): While a budget should be aspirational in improving financial performance, it must also be attainable. Sometimes owners pressure managers to cut costs to an unrealistic level or assume all vacancies will vanish. Agreeing to a budget that you know is unachievable (just to please stakeholders upfront) will only lead to pain later. It’s a pitfall to avoid at the negotiation stage – push back diplomatically with data if an owner’s ask is not feasible. Provide options or phased approaches. For example, if they demand a 10% expense cut, maybe show 5% now with a plan to get another 5% through specific initiatives. An honest, achievable budget is better than an unrealistic one that sets everyone up for failure.

Lack of Stakeholder Buy-In and Communication: A budget created in isolation can fail due to lack of support. If you don’t communicate with engineering or maintenance staff, you might under-budget or over-budget their needs. If you don’t discuss with the owner, you might include items they’re not willing to fund. Neglecting to involve key team members (chief engineer, leasing agent, etc.) is a pitfall; their insight can catch things you missed (like an aging equipment that needs replacement). Also, not explaining the budget to your site team after approval can cause execution problems – e.g. if engineers aren’t aware that only $X is budgeted for overtime, they might incur more. Bring everyone on board with the plan.

Failure to Track and Reforecast: The budget shouldn’t be static. A pitfall is thinking once it’s approved, you’re done until next year. Monitoring actual performance against the budget throughout 2025 is essential. This helps catch any developing issues early (maybe water bills are trending higher – you can investigate leaks). If a major change occurs (loss of a tenant, spike in utilities), a mid-year reforecast might be wise, and communicating that to ownership shows proactiveness. Some managers who fail to track find themselves with nasty surprises at year-end (and then owners asking why they weren’t warned). Don’t let the budget gather dust – use it as a tool all year.

By being aware of these pitfalls, you can take steps to avoid them. In practice: start early, do your homework with data, be realistic, include safety nets, and maintain transparency. As one expert insightfully said, budgeting is not “set it and forget it” – every assumption should be tested and tracked. If you anticipate challenges (like needing to cut costs or manage a big project), formulate a plan in the budget rather than hoping for the best. With careful planning and avoidance of these common mistakes, your 2025 budget is far more likely to hold up under pressure and deliver a successful year.

Streamlining the Budget Process with AI and Automation

The year 2025 isn’t just another cycle for budgeting – it’s also a time where technology, especially AI, is changing how budgets are prepared. Commercial real estate has historically involved many manual, time-intensive tasks during budget season (spreadsheets, endless lease reviews, back-and-forth emails). Now, modern tools and automation can take on some of that load, enabling property managers to work smarter and faster. In fact, AI and advanced software are increasingly baseline tools in CRE operations. Here’s how you can leverage them in your budgeting process:

AI-Powered Lease Abstraction and Data Extraction: One of the most tedious parts of budgeting is combing through lease documents to confirm clauses for each tenant (base years, expense stops, rent escalations, renewal options, etc.). AI can dramatically speed this up. Tools like Prophia and others use artificial intelligence to abstract leases and make key data easily accessible. For example, with an AI lease abstraction platform, you can quickly pull all expense recovery terms building-wide, ensuring you don’t miss a cap or an exclusion. AI lease data tools can verify recoverable expenses and even calculate estimates, helping you get as close to zero variance in your budgeting of reimbursements as possible. They can also surface unusual lease provisions that might otherwise be overlooked (such as a clause about how utility costs are adjusted or a tenant with a unique insurance responsibility). By entrusting AI to handle the initial data gathering, property managers save time and reduce human error, focusing instead on analysis and decision-making.

Automated Rent Roll and Income Forecasting: Some property management systems and AI integrations offer rent roll automation. These features generate future rent schedules with a click, incorporating all known lease events (rental increases, free rent periods, new lease commencements). Instead of manually building your rent roll in Excel, the software can produce it and even update it if assumptions change (say, you add a prospective lease). This not only saves time but increases accuracy – the AI will consistently apply the terms without forgetting a step-up or miscalculating proration. With a solid automated rent roll, you instantly answer the crucial question, “How much rent will this building earn next year?” with unmatched accuracy compared to manual methods.

Expense Analysis and Anomaly Detection: AI shines at sifting through large datasets to find patterns. If you have several years of operating expense data, an AI tool or even advanced analytics software can identify trends or outliers that might influence your budget. For instance, it could highlight that electrical expenses have a seasonal spike each August beyond what temperature alone would suggest, prompting investigation (maybe equipment is less efficient then). Or it might flag that one vendor’s costs have risen faster than inflation for 3 years, suggesting a renegotiation. Some AI platforms, including those offered by big firms, can integrate with your accounting system and automatically flag variances or atypical spending that a human might not notice quickly. This helps in both setting the budget (identifying where to cut or where to allocate more) and in monitoring during the year.

Budget Consolidation and Scenario Planning: For portfolio managers overseeing multiple properties, AI tools can help consolidate budgets and run scenarios. Instead of manually merging dozens of spreadsheets, software can roll them up, ensuring formulas are correct. Scenario planning (what-if analysis) is another area – e.g., an AI-driven model could instantly show the portfolio impact if inflation is 1% higher, or if occupancy drops by 5%. This allows asset managers and property managers to discuss contingency plans with real data. It transforms budgeting into a more dynamic, strategic exercise rather than static once-a-year number crunching.

Natural Language Processing for Reporting: Generative AI (like GPT-4) can be surprisingly useful in the budgeting process for creating narratives and reports. For example, after you compile the budget numbers, you could use an AI assistant to draft the budget narrative or cover letter, by feeding it the key changes and having it produce a well-structured summary. Of course, you’d edit it, but it can save time formulating the initial text or even translating data into layman terms. Additionally, AI chatbots can assist with querying your data. Some advanced setups allow you to ask questions in natural language like, “Which expense category grew the most since last year and why?” and the system will answer from the data (if notes are input) – almost like having an analyst on call.

Dedicated CRE AI Assistants: The commercial real estate industry is embracing AI-specific tools. For instance, “CRE Pro by FaupelX” is a GPT-based assistant designed as a commercial real estate advisor. While it’s a general advisory tool, such an AI could help answer budgeting questions by leveraging industry knowledge. Similarly, the A.CRE (Adventures in CRE) AI Assistant GPT is trained on CRE content and can provide quick answers to questions you’d normally research manually. Imagine asking an AI, “What’s the typical operating expense ratio for an office building in a suburban market?” or “Give me ideas to reduce energy expenses in a 100,000 sf office building” – the AI could instantly draw from vast resources to inform you. This doesn’t replace your expertise, but augments it with quick access to information or ideas.

Task Automation and Workflow Tools: Outside of AI, don’t forget the power of good old automation in budgeting. If you use software like Yardi, MRI, or Argus, explore their budgeting modules – many can automate tasks like importing last year’s actuals, applying inflation factors across categories, or distributing costs by month. Some even integrate with work order systems (to project maintenance costs based on logged requests) or with vendor databases (to update contract prices). Workflow tools can send reminders to team members for their inputs (e.g. send the chief engineer a task to submit capital repair needs by a certain date). Using these tools enforces the process timeline with less micromanaging.

AI for Error Checking: A subtle but valuable use of AI is as a second set of eyes. It can review a budget for logical consistency. For instance, if you provide an AI your budget data, it might catch that you budgeted higher occupancy but also higher janitorial cost to tenants (which might be inconsistent if tenants clean their own space), or that you have more revenue but didn’t increase management fees accordingly. Essentially, it can perform a sanity check or compare ratios to typical benchmarks and highlight areas to review. This can complement your own review and catch mistakes or oversights.

Industry Examples and Adoption: It’s worth noting that major CRE firms are actively adopting AI in asset and property management. The industry consensus is that AI is becoming an expected part of the toolkit. This means more tools and support will be available to property managers. Even smaller companies can access many AI tools via cloud services or PropTech startups. As one CRE tech article noted, budget season is a “prime candidate for automation” given its heavy data processing and repetitive nature. By embracing these tools, you can shave days off the process and reduce errors, freeing you to focus on analysis and strategy.

In implementing AI/automation, a few best practices:

• Follow your company and owner policies

• Ensure data integrity: AI is only as good as the data fed to it. Clean up lease abstracts, update all information in the system, and cross-verify key outputs.

• Use AI to augment, not replace, your judgment: For example, an AI might suggest a trend, but you apply the local context or nuance to decide if that trend holds for your property.

• Get trained: If your company offers new software or AI tools, take the training. The time saved during crunch time will be worth it. Many platforms are user-friendly, but a little upfront learning helps.

• Maintain security: Budget data is sensitive. If using third-party AI tools, ensure they are secure (no leaking confidential financials). Many vendors have enterprise solutions for this.

By integrating AI and automation into budgeting, you can reduce the “grunt work” – like chasing numbers and double-checking leases – and devote more time to the high-value aspects of budgeting (strategy, decision-making, stakeholder communication). The result is not just a faster process, but often a better budget: more accurate, more thoroughly considered, and scenario-tested. In the end, that means a smoother year of managing the property with fewer surprises. Embracing these tools in 2025 and beyond will keep you at the forefront of property management practice, as the industry increasingly expects tech-savvy efficiency from CRE professionals.

About the Author

Hi, I’m Matt Faupel — Founder of FaupelX and a passionate advocate for unlocking potential in commercial real estate and beyond. Through this newsletter, I share insights, strategies, and tools to help you lead, grow, and stay ahead in a rapidly evolving industry.

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