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Purpose Built Office Leasing Tactics and Strategies for Agents

city buildings on skyline

The client or the owner of a commercial office building wants to know that you have a definite plan and a ‘toolbox’ of strategies that you can apply to their leasing challenge.  The ‘generic’ approach to office leasing doesn’t work anymore.  You are the leasing ‘strategist’.

Be more specific with your leasing engagements with properties and clients.  Put the client’s property leasing requirement firmly into the property market in your location and build your leasing stories and tactics around that.

Asking the Right Leasing Questions

There is no ‘one fits all’ approach to finding tenants and filling any vacancies in office leasing.  Be specific when you try to help your landlord clients with their leasing challenge; put some ‘purpose’ into your leasing plan and provide ‘clear strategies’.   Here are some ways you can do that:

  1. Know the major buildings locally – As part of any leasing project, be aware of the other buildings in the location that could have an impact on your client’s property and the known or upcoming vacancies.  There will need to be a ‘point of difference’ to help your property with its leasing requirements stand out as relevant and valuable to tenants and local businesses.  How can you do that?
  2. Target tenants and businesses – Certain tenant types will match your vacancies in your listed property.  The marketing of the vacancies then becomes more direct and specific.  Build a plan of specific marketing to reach out into the best tenants and businesses that you think would be good candidates to occupy your listed property.
  3. Risk reduction is important in what you do – This means that you can and should be part of the property improvement plan by providing better tenants and creating quality leases.  How can you do that? The answer will help you engage with your clients with their investment requirements and strategies.
  4. Vacancy reduction is normally achieved through tenant attraction and retention – Every exclusive leasing appointment should have a tenant attraction and retention plan.  That will involve some specific rents and lease offerings with existing tenants.  Each year those plans can be modified as part of the
  5. Incentives and benchmark rentals should be set – The property market will change, and with that change will come variations with supply and demand impacting your lease listings.  The enquiry that you want or get with your property listing will be reflected from the rents you are asking for, and incentives that you are providing.  Understand what other tenants are being offered currently in the local property market, and then package your property and its vacancies to have some advantage in rental and or incentive offerings.  Make your property the ‘best value’ in office leasing locally.  It doesn’t matter too much where you start with rentals, but it does matter where things finish.  Your rent review strategies will be a useful way of improving things from the starting rent.
  6. What are the improvements and fit-outs possiblities to apply? – Prepare your vacancies for leasing by considering the improvements, the services and amenities, and the fitout configurations.  The size of the floor plates will also have an impact on fitout design.

These office leasing strategies will help you build some purpose and momentum into your professional leasing services for your clients.  Be comprehensive in how you build a lease strategy for your clients and their property vacancies.  Be all-inclusive in how you look at attracting potential tenants to the asset and its vacancies.  These are the qualities of a professional leasing agent in office property today.

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7 Ways to Get Ahead of the Competition in Commercial Property Leasing

In commercial real estate leasing, the competition that exists in your property market will very likely be talking to the same very people and businesses that you are.  In saying that, the quality of the connection between agents and businesses or landlords can sometimes be of poor quality, so you have something that you can work with and improve.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Focus on the Right Things

If you are going to stand out as a top agent in the leasing market, then you have to do the right things with real focus and control; and then you should work on the good quality buildings or locations from a leasing and vacancy perspective.

Stand out as the agent of significance for the location and property type.  When you work the better buildings, more inquiry will come your way.

Drill Down into Facts

To get ahead in the leasing market, here are 7 points of focus to drill down into with your landlords and tenants:

  1. Know who you are talking to – Always get to the facts when you are talking to someone new, be that across the telephone, in a meeting, or through a door knocking process in the local area. The people that you talk to will give you the momentum in your leasing business, but understand who they are before you say too much about the property or give out information.  If a person is slow to introduce themselves, then you should also be slow to give out the property facts. There is no point in wasting time on someone that is not fully honest and open with you.
  2. What do they need and when? – Get to the core facts of their property situation. What do they want from a leasing perspective and what will be the critical timing?  Ask about their critical points of choice or need with any property they may find or want to inspect.
  3. Where are they now? – If they are in business now, seek out the facts of that occupancy. It is also valuable to see their current location and how they use premises as part of a business operation.  You can see the interaction between staff, customers, business operations, and layout of the current property.
  4. Exactly what can they afford? – Rents change by location, not just by property type. Tenants don’t fully understand that fact, so a market rent awareness for a new location and property type is valuable.  Help them understand net rents, outgoings, and other operational costs such as water, electricity, and gas.  Those services will be consumable within the property, and the tenant will have to pay as consumed.  How will that happen?
  5. Business requirements for the change – When you ask about their current business, there will be many things to explore in property layout, configuration, improvements, access in and around the premises, and special zones such as showrooms, administration, sales, and storage. See how they are using their current property with these factors in mind.
  6. Staff and customer requirements – How will the balance between staff and customers be accommodated within the building? There will be special zones to consider such as car parking, customer service, customer sales, and showroom access. Remember also the factors of parking that may apply in the precinct and on the street. At certain times of the day there may also be issues with access from busy roads and freeways.
  7. Timing for the change – The timing of property change will be variable and will likely be impacted by individual business activities and seasonal business fluctuations. It takes time to move business into a new building and location. There will be a crossover of time that applies to the relocation into the new property. You may be able to help the tenant in understanding how the new occupancy can commence with rent-free periods and early access being given to the new property and location.

 

There are some quite specific things that you can look into as part of the leasing services and solutions you provide to tenants today. Ask the right questions and go deeper into the issues that really impact the relocation for the business.

The deeper that you can go into the tenant’s situation will show a degree of professionalism that other agents may struggle with. Be special, real, and relevant when it comes to the commercial property leasing market today. Show that you are the best agent or broker to assist when it comes to business relocation and leasing resolve.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Commercial Real Estate Leasing Vacancy Solutions and Strategies

Large entryway with tiles and plants
Vacancies in office property can be resolved through strategy.

In commercial property management and leasing, you have to closely watch the tenant mix and the leases for any upcoming vacancy risk and or tenant in distress. The property market changes all the time, and each city will have unique pressures that can set the momentum to move tenants around and impact business performance.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Local Issues?

So what is happening locally for you in your location? Do you have clients and properties under vacancy pressure? It’s an opportunity to resolve. You really do need to know why vacancies are happening and then work on a strategy to resolve them.

Before I go too far into this concept, I will say that the leasing market is lucrative from a commission perspective, if you focus on one or all of the following:

  • Quality properties – some properties are better than others. Look for the differences in local properties and buildings in your location. Choose the better properties from a leasing perspective.
  • Larger tenancies – the size of the tenancy will dictate more rental and therefore more fees per transaction.
  • Corporate tenants – the companies and corporations in any town or city tend to need property help in relocating and expanding or contracting. You can have an appointment to locate their next property lease.
  • Particular property types – when you look at the rents per unit of area per property type, you will soon see the property types that create better interest from tenants and better rents. That is where you should focus your leasing efforts.

Given these 4 facts, you now know what types of leasing factors should feature in your prospecting model. Take deliberate care to stay within your set leasing criteria. You will then find the tenants and the better properties.

What value do you bring?

So why are vacancies happening in any building or location, and how can you help? To get to the answers, you really do need to look into the following factors and do the appropriate assessments:

  1. Rental pressures and shifts – rents that are consistently climbing will reach a plateau where business owners will resist leasing. In a city where rents are escalating, understand the realities of a business paying higher occupancy costs. What are the limits?
  2. Competing properties – other properties locally are likely to be competing for your tenants so watch the problem and intervene where necessary.
  3. Occupancy costs – rent and outgoings all add to the cost of occupancy; a tenant has to be able to afford the total occupancy package.
  4. Tenant mix problems – some tenants have issues with being close to others and other business types; look for those problems.
  5. Permitted use or exclusivity – in a larger building where you have multiple tenants, ensure the balance of tenant mix, and avoid giving away exclusivity (retail properties in particular).
  6. New properties being developed – any new property will shift the balance of supply and demand, thereby pushing businesses out into the leasing market.
  7. Landlord issues – some landlords are very difficult to work with, and will give tenants a good degree of frustration as part of lease negotiation and occupancy.
  8. Quality of services, amenities and improvements – buildings age as do the services and improvements.

From these things, you will find the properties and the businesses needing leasing assistance. At that point you have some advantages to work with.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Commercial Real Estate Brokerage – How to Help Your Clients with Leases and Tenants

man standing by arrow
Help your clients with their leased investments and tenants.

It is one thing for your client to purchase a property with the tenant in occupation. It is another for them to purchase a high quality investment with an excellent lease covenant and a high quality tenant.

The fact of the matter is that lease documentation will support the investment and on that basis the lease documentation should be analyzed for opportunity together with the tenant(s) before your client purchases the property.

What do they want?

Most clients looking to purchase a property will focus on a property and its location first and foremost. They may look into the basic facts of the lease structure and strategy across the tenancy mix, but rarely will they read the lease document itself as it applies to each and every tenant. That is where you can add value and provide commentary relating to the investment over time as that investment may be supported from and through the lease documentation. In a complex property with plenty of tenants in occupancy, that is then a real service and something that should be provided to your best clients.

So the message here is that you can find the right property for your clients in your local area taking into account the complexity of the tenancy mix and the lease documentation. You can determine and understand the investment benefits that the lease documentation in any property will provide to your clients over time.

Lease Facts to Know

Here are some ideas to help you do exactly that:

  1. RENTS: Understand the rental structures and strategies that apply to the lease document. Compare those rental structures to the prevailing market conditions. The type of rental will also have an impact on the outgoings recovery be that as a net rent or as a gross rent. Exactly how can the landlord recover the outgoings from the property given the prevailing market conditions and the existing lease documents? Should any of the existing leases be replaced with better documents when the next lease negotiations arise?
  2. RISKS: Are there any risk exposures within the tenancy mix? Risk will usually be created through a future threat of vacancy, or an existing vacancy exposure. You can deal with these problems through planning tenancy placement and negotiating leases well in advance prior to expiry.
  3. COSTS: Assess the levels of outgoings as they apply to the particular property under consideration by your client. How do those outgoings compare to the industry averages for the property type in the location? Look at the history of outgoings expenditure within the property over the last few years. Look for patterns of expenditure and make sure that the costs to run the building are genuine and real.
  4. MAJOR CAPITAL COSTS: Whilst ordinary running costs will likely be recoverable through the various types of lease rental and documentation, major capital expenditure items will not be recoverable in that way; they are a property owner cost. On that basis you can review the property for upcoming items of major capital cost outlay. Will your client have sufficient funds to cover such a capital expenditure in the timeframe required for renovation or rectification?

So there are some good things that you can do here when it comes to helping your clients with lease documentation and property selection. You could help them understand the way each and every lease document will work as part of their overall investment performance and result.

Look for the strengths and weaknesses in lease documentation as it applies to investment property today. Show your client exactly how they can benefit from a well negotiated lease and a high quality tenant.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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The Core Principles of Lead Generation in Commercial Real Estate Brokerage

business man talking on cell phone.
You can create plenty of leads in commercial real estate brokerage.

In commercial real estate leasing, there are plenty of lead generation opportunities to be had when it comes to tenant placement and leasing activity.  In any town or city at any time, there are usually plenty of tenants looking to move for a number of different reasons.

Your job is to locate those tenants at the earliest possible time before they consider moving and changing premises.  The relationships that you strike with tenants locally will help you grow leasing activity and opportunity.

There are two sides to the levels of new business that you create as a property leasing specialist.  Firstly you should be working with landlords helping them with vacancy problems and tenant mix strategies.  That in itself is quite specialised process.  Secondly you should be working with local businesses and tenants to help them relocate at the right time as part of their business activities and growth strategies.

What’s it all about?

So the message here is that you should be focusing on lead generation with both landlords and tenants.  Separate strategies are required.  You should be connecting with these two groups in a regular and ongoing way.  That is why your database and your prospecting activities are fundamentally important to lead generation in commercial property leasing.  Tenants and landlords should be segmented within your database, and relationships should be growing with each qualified lead or prospect.

Specialist leasing services for a location and property type are always in demand.  Consider your answers to these questions:

  • What is your specialist service?
  • What values and opportunities do you bring to the landlords and tenants that you serve?
  • How can you improve your professional service offering to both landlords and tenants?
  • Why are you the leasing expert for the area and the location?
  • How can you market vacant premises more directly and effectively?

An important factor to remember?

It is an interesting fact that your database and the people within it are perhaps the most important factors of leverage that you can apply to the lease negotiation process.  If you are growing your database daily and regularly, the landlords and the tenants within your list will allow you to quote any property, vacant premises, or a new leasing opportunity quickly and directly.

If you are struggling in the property market now with leasing activity, take a serious look at your database and start to improve it and grow it through regular contact with new people.

When you know lots of people, you can create leasing churn and activity.  Here are some ideas to help you improve your listing conversions and leasing results:

  1. CONTACT SYSTEMS: Keep in contact with all local businesses. You will find that businesses are moving and changing premises for many different reasons.  Make sure that they remember you at the right time when it comes to changing location.
  2. QUALITY CONTACTS: Network the tenants in high quality buildings. The tenants in high quality buildings are generally those businesses that can afford better quality occupancy and longer term leases.  The commission you achieve from such a high quality property leasing transaction will generally be higher per unit of space under lease.  Many corporate tenants today require the services of a tenant advocate to help them find new premises and other properties.  You can offer comprehensive and specialised tenant advocacy services.
  3. LOOK FOR CHANGE: Look for tenants moving premises or those that are under some form of business pressure. When you canvass through an area or a location, look for the signs of change. You will see some businesses that are under pressure to relocate.  Levels of stock, lack of parking space, lack of storage, and growth of business activities are all signs of a tenant or a local business needing help.
  4. SERVICE OFFERING: Establish some comprehensive tenant placement services. As mentioned before, tenant advocacy can be part of the services that you offer.  In other words you will be locating a tenant into a new property.  In that case the tenant will be paying your commission and they will be your client for the purposes of the transaction.  The larger corporate tenants are generally quite comfortable in seeking out and using the services of a specialised tenant advocate.  They are also prepared to pay the necessary fees for service.
  5. FRANCHISE BUSINESSES: Establish contact with local franchise businesses. Many franchise business models focus on factors of location first and foremost.  They generally need to locate a new franchise business into a zone or precinct after they have undertaken the necessary market research and study.  Make direct contact with local franchise businesses to understand the preferred business locations and lease circumstances that they prefer.  They may also share with you the terms and conditions of the typical franchise agreement at they use.  The franchise agreement will need to be integrated into the lease terms and conditions that you may negotiate.

So there are some things that you can do here when it comes to lead generation in commercial real estate leasing.  Understand the differences between landlord activity and tenant activity.  You can offer specialised services in each case.

You can get plenty more lead generation tips and ideas in our eCourse right here.