Leasing commercial property today can be a challenge for all sorts of reasons. The landlords that we act for and the tenants that we negotiate with all have requirements to be balanced into a lease structure. Negotiating a lease can be a real challenge.
When you look at the financial or calendar year, there will be ‘seasons’ of property activity. Sales and leasing activity for a property type will vary during those ‘seasons’ of business and tenant activity. As the local real estate agent you must do the best you can with leasing given the rental and leasing requirements. Understand what the property market is doing and then ‘prospect’ into it. You will soon find the landlords and tenants that require help.
Reflecting on today’s property market, here are factors that require attention of the leasing agent:
- Comparable properties in the local area should be understood and watched. From time to time you will see those comparable properties take your tenants or seek to attract your tenants away from their leases. It’s all about you being competitive as a property when it comes to lease terms and conditions. Use a tenant retention plan to keep your tenants happy and in occupancy. Talk to your tenants regularly.
- Market conditions will change during the year. Pay particular attention to the factors of market rent and vacancy rates. See the trends in both and look for the upcoming new property developments that could impact the supply and demand factors of occupancy.
- Rents and incentives will change during the year. Gross and net rents will rise and fall based on the supply and demand for space. Importantly your vacant areas should be competitive when it comes to marketing vacant space to new tenants.
- Local property types will show trends when it comes to rents and vacancies. Watch what the market is doing. Stay ahead of the trends and advise your clients and landlords how to handle their tenants and rents.
- Landlord requirements will vary based on the holding requirements and cash flow of the property investment. The leases that you negotiate will also be based on the holding requirements of the landlord. Understand these factors.
- Vacancy factors will have an impact on the tenant mix. Work with your tenants to keep the vacancies under control. Talk to new tenants to encourage lease negotiations of currently available space.
- Outgoings recoveries will help the landlord with net rents. Look at all the leases to see what recoveries can and should occur. Reconcile and charge those outgoings correctly in accordance with the leases.
- Lease documents will vary across a property and on a landlord by landlord basis. Read your leases and enforce them correctly.
To be successful in leasing commercial property today, you must understand the market, the landlord, the local rents, and the property performance. It is a fine balance that is a professional requirement for property leasing agents.