When it comes to commercial property management and leasing today, the factors of tenancy vacancy are something that you would normally want to avoid. The basic object of property performance is to stabilize and grow the income base from the tenancy mix. When businesses and tenants are under pressure, you need some real strategies to renew leases early for all the good tenants within your property. Here are some ideas from our Newsletter for Commercial Agents.
Tenant Retention Plans
This can simply be called the development of a tenant retention plan. It is a service that can be provided by the commercial property agent to the landlords that they act for. The fees to be achieved from renewing a lease with the sitting tenant are usually less than those which you would get from a new tenant coming to the property. However, the fees are contained and readily available for the proactive agents offering tenant retention services.
So here are some strategies available for optimizing the current tenancy mix and renewing existing leases.
- Keep close eyes on all leases coming up for expiry or option inside of the next two years. Understand the high priority leases that will expose the landlord’s cash flow to instability. All of these identified leases should be tagged for early renewal and negotiation. It is necessary to work with the landlord and the tenants regard future occupancy needs. There may also be other factors such as property refurbishment to consider as part of the lease renewal.
- If your property involves anchor tenants, these leases need to be protected at all costs. They are generally leases for very long lease terms over sizeable space; however any pending expiry and loss of the anchor tenant may totally destabilize the property and all smaller tenants. Anchor tenants are very special when it comes to maintaining property performance.
- The clustering of tenants within the tenancy mix involves considerations of tenancy size, tenancy offering, and businesses of similar type. The clustering of tenants can occur in office or retail property and will be based on the expectations of the business community and the local customers. The successful clustering of tenants will improve the business identity and vibrancy of the property. The net result is improving rental.
- Some of your tenants at lease renewal time will require a modified occupancy including more or less space. This may require negotiations with adjacent tenancies or total relocation to other areas within the building. Either way the process works as long as you are working well in advance with all the relative tenancies and their occupancy needs.
A top performing property is the result of careful lease management strategies applied in balance with sensible property financial management. When it comes to the times of a tougher property market, these factors are highly important.