In today’s commercial real estate market, tenants know exactly what they want when it comes to a property and the location. They also know that they have the favored position when it comes to lease negotiation. There are plenty of vacant tenancies to choose from. The rents and or deals that are offered today give tenants great flexibility when it comes to lease negotiation.
The landlord today needs to be guided through the facts of the market so that they suitably match the needs of tenants as part of the typical property negotiation. Unrealistic landlords waste everyone’s time. It is the job of the agent to help the landlord through the facts of the property market as they exist today. You will need evidence to support your rental recommendations and negotiations.
So exactly what do tenants require when it comes to leasing premises today? The situation will vary from property to property, but here are some common facts for you to consider.
- They want a quality property that is well maintained. This means that the landlord should optimise the presentation of the property at all times. The maintenance processes will help stabilise existing tenant occupancy and attract new tenants to vacancies.
- Regardless of how much the landlord thinks the tenancy is worth in rental, the tenant will not pay above the market rental. Given the large number of vacancies generally available, most lease negotiations will need to be keenly structured with lease incentives, landlord funded fit out works, and attractive lease occupancy conditions.
- Quality services and amenities as part of occupancy should be provided. The convenience of being a tenant in the building should be an obvious factor to help the tenant negotiate through any new lease.
- Tenants today really do not need to negotiate on vacant premises to any great degree. There are plenty of tenancies to choose from and the first offer you get from the tenant may be the only offer that a tenant provides. They will soon move on to another property. Landlords with an inflated view of rental or lease terms and conditions, may very well lose an interested tenant.
- As a general rule, early occupancy for the purposes of fitout establishment should not be provided until the lease is signed and all other lease obligations are paid by the tenant. Many tenants have changed their mind on a property between commencing fit out design and construction, and signing the lease for occupancy. Be aware of the problem and do not fall into the trap.
Today’s leasing market is quite active from a tenancy perspective. The tenants can call the deal or negotiate keenly. As agents we need to align ourselves to the tenants in what they are looking for when it comes to property occupation. We then need to help our clients as landlords adjust to that process.