In the commercial real estate market, change happens all the time, and that change will bring with it opportunity with listings, clients and commissions. So the message here is that you should look for change locally in your town or city and ‘tap into it’.
Where’s the Right Change?
So what sort of change can you find? How can you use it? You gather information from a number of sources. Think about some of these for starters:
Local businesses – Watch for changes in local businesses. Most particularly that could be in manufacturing, staff, or business direction; perhaps even a new contract being granted for a new project in a business segment. A good way to tap into those things will be through the names and the stories that you find in the local newspaper. Go to the business section of the paper and read it to get names and information about things that are happening in different business segments or corporations.
Use Google – You can set up the Google search engine to send you news alerts about particular things and issues. You should at the basic end of the concept have Google alert you to stories about your suburbs and city. Perhaps you can add other search criteria to the alerts such as commercial property, shopping centers, industrial property, and property investment. Each time you go into the news segment of your browser you can then see if any new stories appear.
Search CEO’s – Through the search engines search out the names of CEO’s and important people for the bigger businesses. When you have a name you have something to focus on in contact calling and direct mail or email.
Local franchise groups – Go on to the internet and search the local franchise council (or equivalent) so you can get the franchise group names that may be active in business segments. From that point you can make direct calls to the franchise groups to see what they are doing and needing from a property perspective.
Annual reports – Some of the local public companies and businesses will put out annual reports for their shareholders about their business results and future directions. Get the reports and review them for change and challenges; information like that is valuable. Look at the property asset base for the larger businesses and understand what those annual reports are saying. Those companies may own or lease properties locally. What help do they need with property?
So the message here is that you can find change in your local property market. You can then do something with that information and build fresh leads and client activity.
In commercial and retail real estate today, there is a significant shift in leasing to franchise tenants in the tenant mix. The reason being, that franchise groups bring a brand name and a business model to any vacant area in a property.
Not all franchise tenants are the right choice for a commercial or retail property. Due regard should be given to the existing mix of tenants and just how the franchise tenant will integrate into the overall property. Some of these franchise tenants can create extra demand on the property such as:
Access to the premises
Rubbish and waste disposal
Hours of operation
Marketing and display of signage, etc.
So a lease for a franchise tenant should be carefully considered and negotiated. That being said, many franchise tenants will have their own lease to submit to the landlord of a property. Whilst that is convenient, the landlord should carefully consider the differences between the franchise tenant lease and the standard lease for the property. In most cases the lease provided by a franchise tenant focuses on just one thing; the running of the franchise business.
Here are some tips for negotiating leases with franchise tenants today:
Meet the tenant on site and walk through the factors of occupancy that are critical to the operation of their franchise business.
Understand that the franchise business will have a business agreement that will need to integrate with the duration of the lease of the property. Some landlord flexibility may be required to make that match.
Ask questions about special occupancy needs such as grease traps, air conditioning, cleaning, refuse, and customer involvement. If there is a cost to be considered, ask about who pays.
The make good provisions at the end of the lease will always be important. The landlord requires clean and reinstated premises.
Understand just how the tenant will be integrating their marketing into the property and what signage they will require for the process. They will need to position signage where consistent branding messages are conveyed to the customers and passing traffic.
If the tenant operates outside of standard property hours of operation, it will be necessary to consider the costs that occur as part of that process. The costs should be directed to the tenant to pay as part of the lease structure.
As to who will be the lessee in the property will be a valid and important question. Normally the franchise group does not want to lease a tenancy space unless it is of prime importance to their business model and operation. That is why they only directly lease the prime locations.
A franchise type tenant is a good tenant; they just need extra attention to ensure that the lease in the property works for both parties.
Asking questions in the lease negotiation will always help with the future occupancy for both parties. Look for any issues of challenge and deal with them upfront.
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