Commercial real estate leasing is quite special in a number of ways. There are pressures to work through with tenants and landlords. In this audio program by John Highman, you can learn how to optimise the leasing process for better results. (NB – you can get plenty of leasing ideas in Commercial Snapshot right here – its free).
John talks about the property leasing market today and what needs to be done to convert better enquiries from tenants. There are some other ideas in the audio program about listing, marketing, and negotiating.
Having spent a lot of time working on and in various building and leasing projects over the years, I know that the opportunities of working with commercial tenants and landlords today will always bring in other business openings into the future. (NB – you can get more commercial brokerage ideas here in our Snapshot program – its free)
Everything in our industry is linked, and your clients locally will usually have diverse needs in leasing, sales, and property management at some stage. It is all a matter of timing and relevance. Are you ready for some property leasing action?
Landlord and Tenant Opportunity
Recognize that a simple property lease transaction can open the door for you with a key landlord or business owner. Relationships are important. It can also be said that if you know plenty of things relating to local rents, lease documents, occupancy costs, property performance, and fit-out improvements, you can add considerable value to a property in capitalized cash flow. Strategy and ideas can help facilitate an agreement between a landlord and tenant.
In this audio program, I talk about the importance of the tenant and landlord relationship and how you can tap into it as part of your commercial real estate career.
How involved are you with your database list currently?
How accurate is that list?
Are you building some pipeline of contact with all the people in your list?
The secret to finding and converting more commercial real estate tenants will always be in your canvassing and prospecting activities as a broker or an agent; those are the specific activities that you activate and deploy every day into the local business community and or the tenants in your location. Landlords and tenants will be critical to the growth requirements that you have in commercial real estate leasing. Grow your contact model, and grow your real estate business.
Consider these questions:
How many new tenants to contact each and every day?
Understanding your town or your city, and the local businesses to you connect with regularly each 90 days?
If you were to show the landlord your database to impress them as part of the property leasing presentation, how impressive with your database be, and would it attract the landlord to your services?
Ratios and Results
There is a ratio to know and respect here, particularly as part of this leasing and investment property process. The number of listings that you convert exclusively over time will be influenced greatly by the number of landlords that you know personally and connect with regularly. Focus on building trust and confidence with the landlords that you work for. Provide regular updates of the leasing market together with comments leading to market rentals, incentives, and lease strategies.
Audio Program about Tenant Attraction
In this audio program, john Highman shares some of the proven strategies and ideas that can help you find better quality tenants and better landlords to work for. Honing your prospecting activities with a bias towards quality and ongoing contact will always be a valuable strategy to deploy. Connect with the landlords and tenants using relevant local information and local market knowledge. Connect with landlords and tenants at least once every 90 days.
You can have rent strategies for the short term or the long term. You can boost property value in a rental lift.
You can encourage a tenant to lease a property using fair and staged rents, or you can ask for the highest levels of income from the leased space and run the risk of a vacancy occurring.
Don’t forget that you also have net rents, gross rents, and incentives to work with in any lease negotiation. The income or rent that you start with can be enhanced over time, so look at the bigger picture when negotiating with tenants.
Don’t focus so much on the start rent, but the income over time. Look at the rent reviews and how they can support stable occupancy for the longer term.
In this audio program, John Highman talks about the rent and leasing strategies that are so important in today’s property market. You can listen to the audio and download it here:
The fact of the matter is that leads are always available to those people that look and question the events, facts, and people in the property market. Asking questions at the right time, and noting the changes in the property market will help you find your next opportunities for listings and commissions.
In this audio program, John Highman, Commercial Real Estate Coach, talks about the different ways to generate leads for listings and property transactions.
If you are working as an agent or broker on the leasing segment of the market, then look to the ways that you can improve results for the clients and the properties that you serve. A focus on ‘results’ allows you to convert more listings of better quality, and on an exclusive basis. You could say that ‘relevance’ is at the centre of all of that focus and conversion.
When you control the property market and your listings, you can build more momentum into your property efforts.
If you are perceived as the top agent for the location or property type, then ‘exclusive’ listing conversions will not be such a problem.
Create Your Opportunity this Way
Let’s drive some more opportunity your way. Answer this simple question. How can you bring better results to the clients that you serve in property leasing? That’s the question that you need to answer in a very visible way locally.
The tenants and landlords of the location should know you as the ‘go to person’ for resolving leasing challenges. Your leasing ‘visibility’ has to be specialized and locally driven. Here are some ideas to help you do that:
Finding more tenants – Get to know more tenants comprehensively. It is one thing to know who the tenants are in a location or building; it is another to know what they are thinking from an occupancy perspective. The best way to get to know tenants for a location is to concentrate in streets, properties, and business types. In that way you are not ‘shooting blind’. Specific tenant contact will help you with your conversions.
Improving market rents – Hopefully you know what rents are for a location and property type. Property age will have something to do with the rental levels, and market rent will be impacted by supply and demand for the location. So look at those things and determine how you can improve rents for the landlords that you act for. Merge those ‘income improvement’ statements into your listing or client presentation.
Strengthening investment performance – You can improve lease outcomes and results in an asset over time by creating a better lease document with better tenants. All of that will happen from the initial lease negotiation. Look at negotiation on the lease from your client’s perspective; drive that aspect forward. Look at the averages of rent for the property type, understand the asset in question, and build better landlord or tenant perspectives on why the property should be leased in today’s terms.
Shorter time on market – Vacancies cost money within the investment, so find ways to shorten the time on market. Asking rents will have something to do with that, but also will the factors of marketing, negotiation, and inspection. You can improve your professional processes in each of those 3 ways for the transactions you are working on and your clients. Create more inquiry per listing and seek to create better marketing outcomes for all of your exclusive listings. They are the properties that really matter, so shorten the time on market for your exclusive listings, and show your clients how you do that in a positive way.
Relevance is everything in commercial investment leasing. Create significance in your professional property services. Focus on results for your client.
A vacant commercial property is a significant frustration for an investor. They are loosing out on rents and outgoings recovery. Over time that can all add up to a large amount of money and financial discomfort. Look at vacancies for the opportunities that they are for you in leasing brokerage.
In commercial real estate brokerage leasing, there are many things that you can do to improve property performance for the clients that you serve. Ultimately that means tenant placement and rental improvement.
The landlords in your town or city are doing their best to avoid vacancies and or poor tenant mix results. So that is where you can help. Create a good database of tenants and market that service to the landlords that own high quality properties locally. You can also connect with the larger tenants in the location so you can provide a tenant advocacy service.
Here are some ideas on MP3 audio to help with your leasing services and professional skills:
Every commercial property vacancy is an advantage to be seized. The landlord is likely to be moving through some challenges of rents, occupancy and tenant mix. You can do something to help, particularly if you know something about rents, lease enquiry, and tenant placement.
In this audio I talk about the things that you can do with property leasing. Be versatile with the services that you provide and look at the vacancies locally in your town or city for a business opportunity.
Look for the vacant properties in your local area, you will find leverage in working for those landlords. They will be highly motivated to fill the vacancy and listen to you as you make recommendations about property market conditions.
In this audio I talk about how you can do more with vacancies and how your professional services should be positioned within that. One other special note here is that your database in leasing will give you massive momentum if you structure it and grow it over time. In the audio program I talk about how you can use that to build leasing leverage.
The income for a commercial Investment property will have a direct impact on the potential price that sale. On that basis the income needs to be fully understood and investigated as part of the preparation for listing.
Any agent or broker listing an Investment property should take the time to review everything that could have an impact on current and future property income. Look for the strengths and weaknesses that apply to the property income stream and the cash flow for the asset.
Strengths and Weaknesses
The buyers for any Investment property will always undertake a due diligence on the listing and the location; weaknesses will be found so make sure you understand where those weaknesses are and how to address them. They will be looking for things that will have an impact on property performance over time. Some problems in cash flow will have a direct influence on a negotiation for property purchase.
Here are some ideas to help you review income performance for the assets that you might take to the market for sale as an investment:
The gross income for the asset in today’s terms will always be the starting point of an income assessment. Look at the actual volume of rental created from the existing leases and the tenants in occupancy. Understand the elements of cash flow that make up the income stream. Those elements will usually include rental, rental by type, outgoings, special licensed areas in the property, casual rentals, and permanent tenants.
Look at the cash flow per month over a period of time. Understand the gross rental achieved each month over the last 12 months. There will be patterns to the income stream driven by the tenants in occupancy. If there are vacancy factors in the property to deal with, then that will have a reflection in the collective rental. Review the number of vacancies and the negative impact that those vacancies have on the cash flow for the asset.
Understand the vacancy threat that maybe upcoming in the property tenancy mix. Some tenants will be leaving or relocating within the property, and on that basis you should develop a full understanding of how those vacancies will be handled. Some vacancies will be harder to lease than others.
Property expenditure on a monthly basis will reduce the gross income to a net income. The age of the asset will have an impact on property expenditure and maintenance. Compare the expenditure in the property to other similar properties in the same location. Look at the averages, and in that way understand how your asset compares.
Some of the rentals in the property would have been determined on a market rental basis. Compare that market rental to other properties of similar type in the same location. Is your property correctly rented, or under rented?
From the examples provided you can see that there are many different elements of income to look into and review. Some of those income factors can be improved over time, and that’s where the skills of a leasing and or property management specialist are quite valuable.
As an agent or broker, develop a comprehensive investigation process applying to the analysis of the income stream in any investment performance. An income checklist will be very useful as part of that process.
When you lease a commercial or retail property today, it pays to set some rules to the process so you can correctly match the tenant to the property for the fullest of available advantages.
Investment property leasing is where all the important decisions are made to find the best tenants for the investment performance. Each tenant is different, each landlord can be quite special, and between both of those stakeholders you have a property and its occupancy opportunities.
Establish Your Commercial Property Leasing System
Are you ready to specialize in leasing and investment property performance?
Know who you are talking to and always get their contact details first – When an inquiry comes in from a tenant, ensure that you are talking to the right person who you believe is in control of the business. Before you disclose too much about the property, write down the important contact details of the person and the role that they play in property selections and choices. Don’t be too eager to talk about the property without the fullest of contact details from the person you are engaged with in conversation.
What do they really want in leasing new premises? – There will be a main motivator(s) behind a tenant in changing properties. Questions will always get you to a few important points to understand. Of the few factors of importance in finding new premises to lease, a couple of factors will be high on the tenant’s agenda. Get to those facts fast and directly. Delve into location issues, and then improvement requirements in any property to be leased.
What can they afford? – Is it a tenant’s market or a landlord’s market in your location currently? There are differences to watch for, and those differences will impact your negotiations with rents and lease terms. Some tenants have little understanding of the current property market conditions, and the same can be said for the landlords that you serve. Be prepared to quote real market evidence from recent lease deals to occupancy arrangements, lease negotiations and market rentals. Tell the tenants and landlords that you work for how they are positioned in the current property market and how realistic their expectations may be in changing property today.
What property improvements do they need? – Every business will have challenges of placement when it comes to fitting into a new property. Your job is to bring ends to meet together across the void of a leasing negotiation. Your client is the priority above everything else. What are the targets of your client in the lease negotiation?
Factors of supply and demand will impact your negotiation – Always track the vacancy factors in your location. Those vacancy factors will be impacted by supply and demand for the location and the property type. Higher vacancy factors push up lease incentives. A volatile leasing market will drive greater elements of risk for landlords, and that is where a tenant retention plan will help you with the overall income stability for your clients. Become a specialist in tenant retention, lease negotiation, tenant sourcing, and lease marketing. There are plenty of leasing advantages to be had from an active property market with tenants and landlords.