A local tenants list will help your commercial real estate leasing business thrive. It is such a simple idea, and yet many leasing agents overlook the value and the creation of a leasing register for their territory and buildings.
Activate your leasing market with better tenants and landlords. Think about these questions relative to your location or allocated precinct of properties:
How many businesses are in the zone?
What do local businesses expect when it comes to leasing occupancy?
Who are the larger landlords for the location?
Why will tenants and landlords use your services in leasing?
What is the future of space supply in your zone?
How many older buildings do you have that need renovation or demolition?
What are the rents and the incentives today when it comes to new leases in modern premises?
These questions and the answers will help you move into productive tenant discussions through a canvassing activity. Make your canvassing calls every day to the tenants of the local area and in your priority buildings. Know what they are thinking and what they need to move to other properties. Understand why they may stay in their current premises. You can negotiate either way depending on who your client is in the leasing activity.
Leasing Questions that Get to the Facts
These are the questions that you need to address talking to tenants and in leasing property:
Where are they located? Understand the location from the tenant’s perspective. They may have transport requirements, a client base nearby, or some property use factors of a critical nature.
What is the type of building are they situated in now? Know the property in which they are located, and the services and amenities therein. If necessary, visit the building yourself and do some preliminary checking.
What are the types of improvements that they require? Understand the floor area, the floor plates, how a property or tenancy is used currently, and what could be the critical services of the building for a tenant in new occupancy decisions. Questions like security, car parking, client access, climate control, and signage rights can be examples of special requirements.
When does their lease expire? A simple date like this will allow you to predict leasing change and or a future negotiation opportunity.
Who is the decision maker in the business? There is always a series of managers in a company or corporation. The leasing research activity for a business is usually delegated to a junior manager to ‘gather the property market facts’. If you are working with a person of lower rank in the corporate or company chain, ask the questions and provide the answers that they need, however, selectively get to the real facts of the final property leasing decision. Who will be making that decision?
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.
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:
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?
Competing properties – other properties locally are likely to be competing for your tenants so watch the problem and intervene where necessary.
Occupancy costs – rent and outgoings all add to the cost of occupancy; a tenant has to be able to afford the total occupancy package.
Tenant mix problems – some tenants have issues with being close to others and other business types; look for those problems.
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).
New properties being developed – any new property will shift the balance of supply and demand, thereby pushing businesses out into the leasing market.
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.
Quality of services, amenities and improvements – buildings age as do the services and improvements.