Restaurant Suffers Losses Due To Negligent Commercial Property Management

Case Overview

This case involves a commercial property that suffered a significant decrease in property value due to the negligence of the building’s property manager. The property manager had been told about an electrical issue that was causing short circuit malfunctions building-wide. The property manager’s primary tenant was the owner of a small restaurant. In spite of the tenant reporting the issue on many occasions, the property manager made no attempt to rectify the issue. Eventually, there was a building-wide power outage which lasted over a week. The tenant was unable to operate her business during this time. The tenant also lost a significant amount of food that was refrigerated in the building. It was alleged that because these issues were not fixed, the tenant was overpaying in rent for months before the incident. A commercial leasing and rental value expert was sought to discuss how these issues could affect the rental value of a property. The expert was also asked to determine what the proper rent should have been for a property with these types of problems.

Questions to the Mechanical Engineering expert and their responses

Please describe your qualification as they relate to this case.

I am a commercial property generalist with 27+ years of experience in real estate management. I have experience in site analysis, leasing, management, asset preservation, and disposition. I also have experience working with commercial, residential, facilities, and asset management. Over the course of my career, my positions have included responsibilities such as managing maintenance duties as well as overseeing property operations and portfolios. Currently, I serve as the director of facilities management and capital planning for a non-profit real estate developer. I have also served as an expert witness on similar matters in the past.

Would you be able to determine the proper rental value or what the average rent would be for this type of property?

Based on the case facts, a property management expert would be best used in conjunction with a certified appraiser. For any case that is heavily weighted on valuation, an attorney would be best served by consulting an appraiser within the jurisdiction of the case.

About the expert

This expert has over 27 years of experience in real estate management including commercial, residential, facilities, and asset management. His experience includes overseeing safety, environmental compliance, and risk assessment. He has attained various professional certifications in property management from the Institute of Real Estate Management and in green building/sustainability from the United States Department of Housing and Urban Development. He previously served as a maintenance administrator at Cornu Management Company and as the director of operations and vice president of Corcoran Jennison Companies. This expert currently serves as the director of facilities management and capital planning for a non-profit real estate developer in Massachusetts.