How to choose a management company?

An effective management company (MC) selection tender requires more than an evaluation of a company’s presentation and its commercial offer; one should pay attention to the nuances that will help to avoid unpleasant mistakes as early as at this stage.


The tender must begin with detailed terms of reference. The owner’s task is to describe in detail the features of the facility and to list the work that he expects the management company to do. Obviously, the maintenance of a single building with a fully automated control system or a group of buildings with a spacious green area, several entrances and no BMS are completely different types of work that are incomparable in terms of the number of personnel, and are therefore priced differently.

Having a detailed TOR at the tender stage reduces the risk of additional costs in the future, when it turns out that the owner and the MC see the management functions differently.


The desire of the MC to conduct a preliminary inspection of the facility should be an important criterion for the owner. This may seem obvious, however, not all MCs actually inspect the facility before submitting their bid; some prefer to conduct an inspection only at the second stage of the tender, when the shortlist has already been formed and a detailed discussion of the project is underway.

Personal acquaintance demonstrates an interest and a professional attitude. Everything is an evaluation criterion at this point – from the questions asked by the management company to the appearance of its representatives.

The composition of the group at the meeting can also say a lot about the management company’s interest in working with the owner. In particular, is the MC presenting the specific staff members who will work at the facility? A company may win a tender, and then go out into the labor market to find employees. However, reliable, tested staff is 90% of an MC’s success.

If the MC presents a specific team, it’s important for it to include at least a chief engineer and a manager. In that case the owner can ask them specific questions, i.e., how do they envision the building, where will they start, have they already worked with similar facilities? A lot of people often lose major points at this stage, since the absence of experience and lack of knowledge on the subject become obvious at once.

Finally, the participation of management in the tender process and their presence at the company’s presentation are also positive indicators of a company’s interest and willingness to demonstrate its flexibility.

The tender may be a closed one, when all management companies send in envelopes with their proposals and are not personally present at any point. In that case, the only selection criterion is the price, but this approach is fraught with problems in the future. Building management is not a standardized service; it requires discussion and involvement of future participants in the process.


Of course, everyone is concerned with the budget. However, the cheapest offer shouldn’t always be your first choice. Price dumping is common, but in the end, it leads to lower management and service quality: a decrease in planned preventive works and the number and qualifications of personnel on site, reduction of service plans. If the owner understands the long-term consequences of poor-quality service, additional agreements need to be concluded at the operation stage and the final price of the contract will increase. The next issue is financial transparency. Some companies implement an open-book system: actual costs are shown for all types of work, including procurement and outsourcing of certain types of services, and the company’s remuneration is shown separately. In a closed system, the owner only sees the final figure without a detailed breakdown, which makes it impossible to understand how much money will be spent on maintenance, and how much will go to the management company. It may be verbally agreed that certain works are included in the budget, but it may then turn out that some important things were not included. Offers of this type are usually cheaper, and many owners opt for the fixed price, expecting to benefit from it.

The open-book system allows the owner to understand what the management company will do on its own, and what will require hiring contractors. At the same time, check all the chains: request copies of contracts and acts for the MC’s previous work and initial contractor paperwork. If the management company is willing to disclose such details as its employees’ salaries at the future facility, it is a big plus that speaks of its honesty and professionalism.

It is also important to examine a company’s willingness to work on a post-payment basis. Only financially stable companies can afford to work on such terms, and this is also an absolute plus.


The presence of a stand-by emergency team on the management company staff. Everyone is always striving to optimize costs, particularly last year, when business center occupancy has dropped sharply. Few management companies want to keep their staff on overnight or weekend shifts. Therefore, the availability of mobile repair and emergency teams that can move from site to site in the event of an accident is a great advantage for an MC.

Ability to adapt to a rapidly changing environment. In 2020, everyone had to pass the flexibility test: the endlessly emerging new requirements posed by Rospotrebnadzor, the Ministry of Emergency Situations, the Association of Administrative and Technical Inspections, etc. Clearly, management companies capable of responding quickly and flexibly to all external factors have a better chance. How can you tell that a company is efficient? During the team presentation, ask to provide specific examples of their work at specific facilities, and get feedback from the owners (how quickly and how problems were solved).

Company publicity. If a management company is visible on the market and in the media, its representatives speak at professional conferences and forums, that’s a definite plus. It’s vital for a management company not only to do its job well, but to maintain continuous brand awareness in the market, and for its representatives to act as speakers and experts at important industry events and exhibitions.

Creativity in the tender process. It is also very important, but almost impossible to demonstrate in the “envelope-type” tender. With a “live” tender, management companies can compete in quality of video presentations (and, as we know, “gift packaging is half the gift”), in their non-trivial approaches to drafting an offer, tasks, etc. However, impressive creativity should not replace the rational selection criteria.

Attitude towards uniforms. Whose logo will the management company’s staff display on their uniform: that of the business center, the management company, or the smaller contractor company? It may seem like a trifle, but it is, in fact, an important issue. The task of the management company is to do its job well and unnoticeably, so the diversity of uniforms and logos is not a sign of the company’s professionalism. A flexible approach to uniforms is also a plus for the tender participant, if required by the owner.

Willingness to change contractors. If the owner insists on this, the MC must be able to compromise. This is especially true for building owners with long-standing and established relationships with proven contractors. Flexibility, adaptability, the desire and ability to compromise and concede in certain matters are the most important working qualities today.

Current challenges: how business centers are preparing for their tenants’ return in September

Most tenants are planning to bring their employees back to their offices this fall. For some companies it will be the first time after an over a year’s absence. What safety measures are now in place in business centers, and what pandemic-related commercial real estate trends are shaping the new office reality?

Today it’s difficult to imagine a high-class business center that does not disinfect common areas daily or treat the most frequently used objects (door handles, elevator buttons, electronic card readers, and turnstiles) with antibacterial agents several times a day, where sanitizers are not installed in common areas, and where regular disinfection of engineering systems, including ventilation and air conditioning systems is not conducted. Taking temperature at the entrance, masking and a social distance of 1.5 m (2 m in some international corporations’ offices) have become mandatory, and vaccination is strongly recommended. Over 70% of O1 Standard employees have already been vaccinated against Covid-19.

The pandemic has led to the emergence of specific prevention measures, even of entire new trends. Increasingly more tenants are seeking to reduce the number of contractors, not just in order to save money, but also to reduce face-to-face contacts and request a variety of services from the building’s MC, expecting them to work under the one-stop principle. The number of requests for both basic and extra services has increased. This is convenient for tenants, as it allows them to control the progress of work, remotely and otherwise. For the same reason, the tendency to transfer office management to professional MCs is growing. Thus, in Q1 2021, the number of office management contracts in our company alone has increased by 30%.

With the coronavirus-related restrictions in place, many companies have chosen to partially reorganize their offices: create communal workplaces that are not assigned to specific employees and the so-called hot desks that can be reserved, set up team zones and special teleconference meeting rooms. This allows for a reasonable workspace distribution between temporary and permanent employees, increases the acoustic comfort, and enhances social contacts between employees of different departments. It is often convenient for business to engage a management company for this type of work, allowing administrative staff to focus on other projects and eliminate the need to coordinate all work with the general building management company and contractors.

New sanitary requirements have led to an increased number of green certification requests, and business center owners should also be ready for this as well. While people were already concerned with the environmental safety of their workspaces before, the pandemic has further strengthened these requirements. In addition to the environmental certification itself (BREEAM, LEED), there is an interest in new standards that assess the comfort of a person – the Fitwel and WELL systems. In August, O1 Standard completed the first Fitwel certification project for a building in Russia.

We also expect a growing demand for the automation of management processes and MC/tenant interaction. This applies both to the tenant request submission and processing system, and the system of feedback regarding the operation of the business center, infrastructure development, additional services, etc.

The pandemic inevitably requires changes in communications with management companies, such as the digitalization of internal processes in business centers and a direct dialogue with the end consumer – any employee of the tenant company. Business centers need to be prepared for this – and the sooner, the better.

One-stop service for tenants: the benefits of engaging a management company for a business

The pandemic has altered the life of business centers in a major way, strengthening the existing trends and creating new ones: i.e., the number of requests for outsourcing office operation and maintenance to professional management companies is growing.

The number of office management contracts transferred by tenants to MCs has grown: in Q1 2021, it increased by 30% in O1 Standard alone. Prior to the pandemic, many tenants serviced their offices independently or engaged an external MC, while during the pandemic, the number of requests to the building’s MC increased.

Management companies are expanding the range of services provided, which are no longer limited to the maintenance of common-use building systems, but include the operation and maintenance of tenants’ offices, sanitary and epidemiological measures, control of repair work, landscaping, and so on.

Transferring an office under the service of a single building management company has a number of advantages for the tenant: for example, there is no need to keep employees who conduct supplementary work on staff. The range of an MC’s onsite personnel qualifications, as well as the resources and materials available to perform operational tasks, are far more extensive than would be feasible for a company to service its office. Clearly, the employees of a building’s MC have a deep understanding of the specifics of its life support systems, which means that in the event of an emergency situation, they can eliminate it faster and with fewer losses.

Working with the building management allows you to solve a wide range of issues under a one-stop principle, without wasting time on authorization. This is especially important for tenants whose employees are still working remotely for the most part. An MC can perform a wide range of work independently, or by engaging a permanent contractor pool – from painting the walls to the redevelopment of an entire office to comply with a tenant’s new tasks. Considering the shortage of personnel in contractor companies and the rising costs of construction and finishing materials, an MC can offer more favorable conditions by saving on scale. Finally, a professional management company can carry out work in an office, as well as offer modern solutions aimed at increasing employee comfort. For example, it can audit an office’s compliance with international environmental performance standards (BREEAM, LEED) or even evaluate it in terms of its impact on employee well-being, i.e., using the Fitwel system.

Closer to the person: the new role of management companies at business centres

Today’s world is ever more open and ever more fast-moving. The point of intersection of these two vectors, for every office employee, is the place where they work: it has to be designed so that he/she can address several tasks at once. And, after the pandemic, the office and the office building also have to meet COVID safety requirements. So the priority today, in the relationship between building owner and building tenant, is not just meeting the needs of the tenant, but also meeting the needs of every employee who works in the tenant’s office. What does this imply for a property management company like O1 Standard? How can the company help a building owner to strengthen loyalty among building tenants?

From B2B to B2C

Management companies have traditionally seen themselves as B2B operators, working with the  owners of business centres. Today, though, the voice of end-users is ever more important and  “end-user” here means, not so much the tenant, but the tenant’s employees. If too many of them are unhappy with the location of the business centre or its amenities, the tenant will have to think about moving or risk losing its staff. So dissatisfaction among tenant employees has direct impact on the vacancy rate, which is the largest part of a building’s investment value, and the management company needs to worry about meeting the needs of individual office workers if it wants to please the building owner. The focus for management companies today is not buildings, but consumers – the individual end-users of the building. There has been a shift from B2B to B2C. Not every operator in Russia has realised this yet, but the trend is clear and O1 Standard is already responding to it.

Direct communication

How can a management company hear the voice of each individual end-user when there are tens of thousands of them? By providing a mobile app for contactless office access and adding feedback functionality. This way the end-user can communicate his/her comments and wishes to us at O1 Standard, and we have a way of reaching each employee of the tenant company individually. The arrangement work for all parties concerned. Firstly, the employee complains about a problem to people who can put it right, instead of splashing it on social media, and the management company, which has standards for responding to comments and complaints, will settle the problem with him/her personally, without creating an extra link in the person of an administrator or secretary at the tenant company. Secondly, every individual working in the business centre will be kept up to date on local news (the opening of new amenities, such as a café or dry cleaners) directly, instead of going through the tenant’s receptionist, who may fail to pass on information, so that employees do not know about new shops and services. If they do not know about them, they will not use them, so they will not get maximum benefit from the building and will value it less.

The management company can also use surveys to better understand the needs of thousands of respondents and provide the amenities and services that are really needed by the majority of people in the business centre (and not just the administrative directors of tenant companies). For example, not long ago a key need was for ATMs of various banks in the building lobby, but the demand now is for vending machines stocked with products from the nearest supermarket or a pick-up point to collect orders from shops outside the business centre. These most recent needs coincide with the pandemic, which has created demand for contactless transactions.

Benefits for the tenant

Tenants themselves understand that their staff will no longer tolerate being shunted to new office locations, which the tenant has chosen solely for its own convenience. Office employees are making ever more demands on employers for social benefits, office quality and various additional services at business centres. O1 Standard regularly polls individual building users to find out their wishes and last year we registered 140 desired services, from kindergartens to tire fitting. If such wishes are ignored, the tenant risks losing staff, and the building owner risks losing the tenant. 

The battle for loyalty

Attendance at business centres in the pandemic ranged from 5% (during self-isolation and electronic passes) to 50%. Many managers of large companies have reported a decline of employee morale caused by remote working. Sooner or later, staff will go back to business centres and tenants have to think how to make the return as attractive as possible. This is not just about safety (social distancing or wearing of masks), but also about enjoyment: people will be happy to return to an office that offers more than a convenient workplace. The wish list includes new amenities, particularly amenities that let people meet their everyday needs on the way to work or near their place of work, and “greening” of the office (or, even better, of the whole business centre). Greening – making a business centre conform to environmental standards –  boosts levels of personal satisfaction thanks to better use of light and space,  improved air quality, etc., and it is gaining momentum today thanks to environmental certification (BREEAM and FitWel).

COVID safety, upgrading of amenities and environmental certification are all tasks for the management company. So the pandemic has only increased the role of O1 Standard and other management companies in retaining tenant loyalty.

Back to the office

So long as most of a tenant’s employees are working remotely (the case particularly, for Russian subsidiaries of foreign corporations) the completeness of employee feedback is questionable. It may be fragmentary, so that the tenant company cannot carry out systematic analysis and draw correct conclusions. Many workers have not visited any business centres for more than a year, because all communication in their company has been remote, so they are unable to compare conditions in their building with those elsewhere, and even the most complete survey of people working from home will not give a reliable guide to employee criticisms and wishes. We believe that management companies such as O1 Standard are best placed and have the biggest incentive to organize surveys and feedback channels with tenant employees, because no one is more interested than management companies in obtaining accurate feedback to ensure successful return of employees to their offices. An app for this purpose is already being tested by O1 Standard at the Krugozor business centre. We plan to launch it there by the end of the year, followed by extension to our other sites.