Property owners are challenged to meet tenant demands for new security measures because many tenants don’t want to pay for them. The often negative impact that security measures have on Net Operating Income (NOI) magnifies the challenge.
These are among the findings of an online survey conducted by the Chicago-based Institute of Real Estate Management (IREM®). IREM members who have earned the organization’s Certified Property Manager (CPM®) designation and who manage all types of real estate property participated in the survey.
According to the survey, a near majority (46 percent) of respondents say that tenants requesting more security expect building owners to absorb the cost. By comparison, 35 percent report that tenants expect added security costs to be passed along to them, while 15 percent say that tenants willingly will foot the bill.
As for the impact of security measures in place on Net Operating Income (NOI), 51 percent of those surveyed say they have had no effect, while 33 percent say they have decreased NOI. Only 10 percent report that security measures have increased NOI.
Most of the survey respondents (85 percent) say tenants do not complain about being inconvenienced by security measures, which is a clear sign that they are valued. Among the remaining respondents, 14 percent say that tenants complain somewhat, and 1 percent say they complain a lot about being inconvenienced.
When asked to characterize property owners’ security concerns over the past 12 to 18 months, 60 percent of respondents say they have stayed the same, while 37 percent report an increase in such concerns. Only 3 percent of respondents say that owners have become less worried about security issues during the last 12 to 18 months.
Other Survey Results
* Top five security problems are (1) car crime (theft, vandalism, and break-ins), (2) vandalism (including graffiti), (3) controlling access to buildings, (4) theft and robbery, and (5) burglary/break-ins/trespassing.
* Top five security-related liability concerns are (1) injury, (2) resident and employee safety, (3) unauthorized entry/controlling access, (4) lawsuits/premises liability/negligence in general, and (5) vandalism/damage.
* Top five security measures in place are (1) fire extinguishing equipment, (2) fire detection devices, (3) security officers, (4) closed-circuit television monitors, and (5) secured access to equipment, networks, and hardware.
* Top five initiatives undertaken for security reasons are (1) documenting all security and/or criminal incidents, (2) identifying and reporting criminal activity in the area and neighborhood, (3) conducting background checks on employees and/or companies, (4) regularly reviewing and updating all policies and procedures, and (5) regularly testing and inspecting security systems.
* Top five security measures most often requested by tenants are (1) implementing or improving security officer service/escorting, (2) closed-circuit television, (3) access control, (4) more police patrolling/police contact, and (5) improved mailroom/parking security.
The survey of IREM members was completed by 486 respondents, yielding a 95-percent confidence level in the data with a 4.2-percent sampling error. The median size of the properties reported on is 234 units for residential and 227,948 square feet for commercial.
This information was provided by and presented with permission from the Institute of Real Estate Management (IREM). The organization has been the source for education, resources, information, and membership for real estate management professionals for more than 70 years. To learn more about IREM, call (800) 837-0706, ext. 4650 (outside the United States, call [312] 329-6000) or visit (www.irem.org).