Thursday
August 28, 2014

Real Estate Lessons of a Long Winter

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Real Estate Lessons of a Long Winter

Commercial practitioners and property managers can chalk up the winter of 2013–2014 as being an important education in planning for severe weather challenges. Here are some lessons learned this year.

The severe winter that plagued much of the United Sates this year forced businesses to cope with the high costs of rock salt, snow removal, and damage to vehicles and equipment caused by roadway potholes.

Landlords, facilities managers, and those who provide snow-removal services have an obligation to ensure the safety of tenants while providing access to their buildings. But the severe cold and snow strained winter-weather budgets for plowing parking lots, clearing snow from roofs, and trucking snow off site.

This grueling winter’s toll has made it apparent that the processes used by landlords and property managers for establishing budgets and ensuring supplies of salt and other tools for dealing with snow and ice must be reviewed.

The spiraling cost and shortage of road salt made headlines this year. At $200 to $250 a ton–more than twice the usual $65 to $95–the cost of treating a parking lot that holds 100 cars can reach thousands of dollars per storm. Facilities managers were forced to mix sand into their salt to stretch their supplies and, in extreme cases, to use only sand to treat their property. Some rationed salt by using it only in key areas.

Brutal storms from the Central States to the East Coast left facilities managers with mountains of snow gobbling up needed parking spaces, making it difficult for tenants to access their businesses. One way to deal with the problem was trucking the snow off site. But that came with problems: the rental of heavy equipment and expense of fuel and maintenance.  

The threat of a roof collapse on large commercial buildings spurred some landlords to look into clearing the snow. The process for doing so is dangerous and complex and often comes at an additional cost above standard snow-removal contracts. The bill for completing this lengthy task can run to $200 an hour for a crew of four. But snow-removal companies received many times the normal number of requests for their services this winter, so even paying top dollar was no guarantee the work would be done in a timely manner.

This winter also took a toll on employees who worked long hours (even overtime) in below-freezing temperatures. Because of the severe cold, there is a need for more frequent breaks– t’s recommended that workers go inside to warm up every 45 minutes.

Potholes might seem like a minor nuisance, but the costs of repair can add up. Last year, AAA said drivers spent $5 billion repairing damage to vehicles. This year, the auto club estimates that the figure could hit $6.4 billion.

Just think of a twist on the old real estate saying: “location, location, location.” In this case, landlords and property managers must think: “planning, planning, planning.” This starts with making sure equipment is ready well before it might be needed, ensuring that sources for extra salt, sand, and other supplies are identified and that storm response plans are properly communicated.

With proper planning and communication, problems can be lessened or even eliminated. It is important that landlords, commercial property managers, and those responsible for snow removal discuss plans before winter begins.

Last but not least, keeping tenants in the loop about snow-removal plans alleviates uncertainty about how storm cleanup will be handled.

When warm weather finally arrives, it will be tempting to relax and no longer worry about snow until next year. However, the best time for planning begins with this year’s problems fresh on the mind.

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