What Should You Look For in a Commercial Tenant?

When you lease commercial property for a landlord, the issue of finding tenants and more particularly the right tenants will frequently become a challenge. In this property market the number of tenants to choose from is less than a few years ago where the markets was more active, and on that basis the ones that are looking for new premises today are more selective. That says the real estate agent negotiating the lease on behalf of the tenant really has to be aware of the market, the leasing alternatives, and be an excellent negotiator. In only that way can you really bring relevance and focus to the negotiation for the landlord.

Resolve Vacancy Issues Early!

Today the best way for landlords to resolve vacancy problems is to find the best leasing agent in the local area that really does have their finger on the pulse of tenant activity and churn. By churn we mean the tenants that are:

  • Looking to expand premises
  • Looking to contract premises
  • Those that need to relocate to better premises
  • Those that are getting close to a decision to renew their lease
  • Those that do not know what the leasing rates are in the local market and want some help
  • Those that need an incentive to make the premises more suitable for ongoing occupation

Not every agent really does cover these areas very well; they may think that they do, but the reality is that they could do better. This allows the agent that really wants to rise to the top of the leasing market to dominate the tenancy activity, the opportunity to do so.

So exactly what should you look for in a tenant for a landlord? What are the main factors of the final selection of the tenant that will tip the decision? Here are a few to help:

  1. The tenant that can show business success and stability
  2. A tenant that has a good rental history and record from previous lease occupation.
  3. A tenant that brings a good business profile to the property
  4. A tenant that comprehensively benefits and integrates into the existing tenant mix
  5. A lease that complements the investment profile and plans of the landlord for the coming lease term
  6. A permitted use in the lease that suits the property
  7. A lease that improves the rental return from the property in balance with market rental expectations

You can use these as a checklist to get your tenant selection process underway. There may be others to add to the list subject to the property type and property location.

Need more help as a commercial real estate agent? Want some more ideas in commercial leasing? You can get just that at our main website

By John Highman

John Highman is an International Commercial Real Estate Author, Conference Speaker, and Broadcaster living in Australia, who shares property investment ideas and information to online audiences Worldwide.