Class A property managers are some of the most aspirational, proactive and accomplished business people I know. These character traits are crucial to successfully managing and preserving Class A assets. Progress and improvement are their goals and their pain points are anything that stand in the way of these goals. Over the years of working with property managers, I’ve learned there is almost always one common pain point – landscaping and curb appeal. Let’s look at some things new construction investors should be aware of and how they can set up their managers for success and increased ROI.
The Problem
Class A property managers constantly face the same issues. Buildings are constructed with luxurious facades, they are architecturally consistent, structurally sound, clean, fresh, and new, but the landscaping sucks, and there’s not much they can do in the way of improving it. Capital projects are off the table because “the property is only x years old,” and extra dollars for maintenance are frowned upon and seldom accepted when budget season rolls around. Frustrating to say the least.
They are placed on the hook for the performance and appeal of the property immediately after one of the biggest contributing factors – (landscaping) – has just been installed.
The Wisdom Within – ROI
Property managers intrinsically know the importance of quality landscaping as both the initial and ongoing investment has a significant ROI. Think about your own experiences as a consumer. When you walk into a restaurant and your shoes stick to the floor and your arms stick to the table, what are you learning about their culture and how does this translate into kitchen hygiene? When you see a Class C shopping center with six-inch weeds growing through every crack in the parking lot, what level of service do you suspect the management company is providing for their tenants? These may only be subconscious judgments, but they need to be at the forefront of decision making for your business. These studies prove why:
- Multi-family: A study performed by The Danter Company revealed that of all upscale apartment shoppers, 95.4% said that quality landscaping is either important or very important in their selection of place to call home, following second only to washer/dryer hookup.
- Retail: Another study by the University of Washington showed that consumers equate quality landscaping with quality goods in retail. Consumers were willing to pay, on average, a 12% premium on goods from establishments that are accompanied by quality landscaping.
- Workplace: Employees with an outside view of plants experience less pressure and greater job satisfaction than workers without an outside view. They reported less headaches. Psychologists have found that access to green space provides a sense of rest and allows workers to be more productive.
Take, for example, the upper-class tenants that Mazaheri Properties in Oklahoma City draws with their balanced approach to beautiful buildings and substantial landscape investment. OR Look at the plush landscaping at this beautifully rebuilt property that CBRE manages.
Your class A property managers are not letting their facilities become filthy or have six-inch weeds growing throughout the parking lot. But what if your Class A property is home to some subtle nuances of a Class C property? What if 15% of your Class A property is at a Class B or C level? What if it’s only 5%? Is this acceptable? For many of the property managers we work with, these areas stand out like a sore thumb. Where are these nuances found? You guessed it –the landscaping.
The Cause
I don’t believe investors are intentionally sacrificing landscaping or believe that landscaping is unimportant. But decisions are often made that line up with this belief. And since there aren’t usually urgent consequences in landscaping, it becomes easier to sacrifice in this area. If investors want to increase ROI they need to address these non-urgent issues.
- If an electrician does a bad job the lights won’t come on. Urgent consequence.
- If the landscaper poorly installs a low-quality tree, the tree dies 3-12 months later. Non-urgent consequence.
- Landscaper installs plants in compact, clay fill-soil, slowly killing or suppressing the landscaping for decades. Non-urgent consequence.
The heart of the problem is the investor’s belief, whether intentional or not, that quality landscaping is secondary in importance to a multitude of other things. This leads to an unbalanced focus on all the different aspects of construction. This belief is not based on fact. As we learned before, there are numerous studies proving the importance of quality landscaping in a commercial setting.
If investors want to increase ROI they need to address these non-urgent issues.
What Needs to Change
There are several specific beliefs that need to change for a lasting investment to be made in landscaping on new construction.
Landscaper accountability – The landscaper doing the installation is almost never the one doing the maintenance. When plants suffer, the maintenance contractor points to the installer and the installer points back at the maintenance contractor. Who loses here? The property manager and investor. General contractors aren’t typically responsible for landscape maintenance once the project is complete, so they don’t need to find an installer who will take responsibility for the thriving of the landscape – just one who can plop it in the ground. I’ve seen properties go a month between completion of the project before a maintenance contractor is hired. I’ve even seen projects completed in November with no maintenance contractor on site until April. Proper landscape maintenance starts immediately as a project is completed. I’m not saying that an installer won’t come warranty a tree when it dies. But the landscape installer should want to see their customer succeed long-term, not just hope to get the plants through the first year. My idea is to take ownership in the customer’s brand and success. Too many times contractor’s primary goals are to avoid responsibility instead of acting as a purveyor of good work and sustainability.
Inadequate vetting – This morning I have already received three emails from a mass-bidding platform asking for a landscaping and sprinkler bid on new construction. With the click of a button, general contractors can send bid requests to tens or hundreds of companies. The only way to be considered in a stack of 10 or 50 bids is to be one of the lower bidders. Many of the best landscaping companies don’t even bid new-construction work because they aren’t able to do quality work and come anywhere close to the usual low bids. It’s not worth a quality landscape contractor’s time to bid. Thus, the entire pool of bidders often come with lower standards. The lower standards are accepted because the problems caused are non-urgent.
Going over-budget – When a building project goes over budget, landscaping is the first thing cut. It is usually one of the last things completed before a grand opening and the idea of cutting out landscaping dollars seems better than going over budget. But the ROI is almost always there. Often, the difference in a sub-par landscape and a good landscape is not a significant cost change. Even if it was significant – when you pay for sub-par landscaping, you will be paying for it again with a lower ROI by either repair and replacements costs or lower perceived value, or both.
Inspect – Some landscaping issues I have seen when walking a brand-new property are unbelievably obvious. If investors would walk the project soon after the landscape is installed, they would most likely find plenty of things to ask questions about. I’ve seen sod installed on ungraded soil. I’ve seen sprinkler heads sticking three inches out of the ground. I’ve seen trees placed in a hole with no dirt. I’ve seen plants in the ground still in their pots. I’ve seen flowers planted in mulch instead of soil. I’ve seen trees planted crooked – on Class A properties.
Specific sacrifices – When poor choices are made, the following are a few things you will see on low quality, low budget landscaping.
- Downsized plants (inspectors rarely hold landscapers accountable to specified plant size)
- Poor plant quality – purchase volume-priced plants instead of good quality plants and trees
- Haphazard workmanship in plantings, grading, pipe gluing, trench backfilling
- No nutritious top soil, use free fill clay to save money and time
- Mulch is too deep or too shallow
- Poor alignment of row-plantings
- Poorly installed metal edging
- Lack of clean edges formed around trees
These are all sacrifices that will result in an unhealthy, unappealing and difficult to improve landscape installation.
Action Items
How do investors begin to make improvements?
- Investors should advise their general contractors to seek reputable maintenance contractors in the area and have those contractors submit bids for the installation.
- General contractors put their customers interests first if they will find a reputable maintenance contractor to do the installation and sign a one or two-year maintenance contract with the installation.
- Increasing the budget to allow for better landscape installations comes with a significant ROI.
- Hold someone accountable when you find something that looks off and trace the problem back to the source. If you need help identifying the source, call us at 405-241-4874.
End Result
The commercial construction and real estate industry could have a greater positive impact on economies if a thriving landscape were a priority. My hope is for Class A property managers to get some relief when it comes to maintaining outstanding curb-appeal for their properties. I hope to see more of these beautiful large construction projects surrounded by a rich, thriving landscape rather than a sparse weak install. At our company we believe it is our duty to do excellent work. If you own or manage a Class A commercial property you need a company like ours servicing your lawn and landscaping.
