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.
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:
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.
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.
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.
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?
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.
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.
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.
The leasing segment of the commercial real estate market is particularly specialized. Many agents choose only to work on leasing opportunities within their property specialty. That being said, if property leasing is your primary source of real estate income, then you need to consider the quality of property that you work on and the clients that you serve. Low quality listings can be huge amount of work for very little personal outcome or commission. Choose your listings well. Don’t let low quality listings drain your resources and time.
Vacancies in good properties will always attract enquiry. Poor quality properties and vacancies achieve lesser enquiry; that will drag down the inbound enquiry and the achieved rental rate. The net result will be lower commissions. So you need to be selective on the properties and the premises that you work with from a leasing perspective.
So the first priority here is that you should focus on the servicing of good clients and good properties in the market. Research the local area to understand exactly where these clients and properties are located. Put them at the center of your prospecting processes.
It can take time to build the necessary relationships with the appropriate and the best landlords. To make the matter a little bit easier, build an extensive database of business tenants through the region. In that way you improve your value to the landlords that you serve. Soon they will know that you have the necessary tenant contacts and leasing opportunities that they need.
Here are some essential things to do every day as part of specializing in property leasing services:
As a general priority, focus on achieving exclusive listing appointments with the landlords and the vacancies that you service. In this way you can control your market. An openly listed vacancy will give you little opportunity to grow market share, and if you achieve a leasing result it will be by luck more than process.
The first thing that you should do every day would be in telephone prospecting and cold calling. Given that you work with business type tenants, most of your prospecting can occur between 8.00 AM and 10.00 AM. Most of the businesses in your local area will be operational in that time. Your focus should be to talk to the business proprietors and to understand their leasing and occupancy needs. So the prospecting call is a questioning process a rather than a sales pitch. Seek to understand the tenant’s needs and upcoming leasing issues.
Build a significant database as a result of your prospecting activity. That database should be split into tenants of different business types and locations. The tenant database should be separate to the landlord database; it should also be a lot larger. One of the factors of attraction when it comes to pitching your services to a landlord will be that of your database size and its relevance to the property type. For this reason, ensure that your database is comprehensive, large, and totally up to date. It is difficult for a landlord to ignore an agent that has total control and awareness over tenant movement in the local property market.
Stay in contact with all of your clients and most particularly those with an exclusive listing. Keep them advised of the changes to the local property market when it comes to supply and demand for leased space. Watch out for the new property developments that could impact market rentals, lease incentives, and occupancy rates.
Check out the listings that are still on the market and those that are new to your property segment. Wherever possible, identify the resultant lease terms and conditions relating to any finalize lease deal. There will always be a difference between an asking rent and an achieved market rental.
Make sure that your current lease deals are progressing based on the terms of the lease agreement and or current negotiations. Every lease transaction should be supported by valid market rental, guarantees, accurate and legal documentation, and suitable deposits. Stay on top of your current agreements and the parties to the negotiations. Make sure that your lease negotiations are not stalling for any reason.
A leasing agent is always closely watching the activities of tenants and landlords in the local area. You can add to this list above by understanding the greater property opportunity locally and the good clients that you are targeting. Set some rules and start prospecting.
In commercial real estate agency the tenants that you talk to must be qualified before you spend a lot of time with them. Most tenants looking for new or alternative premises to occupy will have spoken to quite a number of local property agents; on that basis you are just another person to get information from. Asking the right questions will help you work with the right tenants in the right way.
Most towns and cities will have a good supply of vacant premises available. We have some good listing stock to work with. If you want to dominate the local leasing market for your property type, it is wise to focus on the best property locations and the quality properties. In that way you will move more listings and do so faster.
Here are ten questions to ask prospective tenants before you get deeply involved in matching listings and undertaking property inspections:
Find out just who you are talking with and determine that they are the principal decision maker that is looking for property to lease. This issue gets more complex when you are dealing with a company or corporation. You may be talking with the local business manager but they may have little decision facility.
Understand their property requirements in location, improvements, car parking, area of premises, permitted use, and rental budget. These simple facts will help you with creating a short list of premises to look at.
The services and amenities in a property may be of relevance given the way the business or tenant operates. Staff and customer numbers will place some pressures on property choice.
A lease can be negotiated on the basis of gross or net rent. Through direct questioning you can see what rent types could suit the tenant. That will then influence the choice of property, the lease negotiation and the initial term of the lease in years and or months.
Ask them about any contacts they may have made with other agents. If your market is dominated by open listings it is likely that the tenant has looked at a lot of your listing stock already; on that basis you can see your commission from a lease agreement ‘disappear’ due to another agents introduction to the same property earlier.
The ideal timing of property changeover will give you an idea of just how important the move of premises is to them.
When you have got these facts sorted and identified you can move to the next stage of property selection and inspection. A wise leasing agent will get all the leasing the facts on the table and clearly identified before the hard work starts in property identification.
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.
When it comes to moving a tenant into a commercial or retail property, you can develop a checklist to keep you on task and cover the critical issues relative to the property and the parties involved.
In leasing and managing a property, there are many things that happen every day to distract you. The checklist process will cover issues well and help prevent errors. Moving a single tenant into a property is not all that hard, although the issues become much more complex with multiple tenant movements, just like that which you get when you are looking after a large project or shopping centre.
So here are some tips that can help you structure your tenant movement processes and controls.
As a general rule nothing happens until the lease is signed by all parties, rent is paid, deposit is paid, guarantees are in and validated, and any other lease requirement completed. Hold on to the keys until these things have been done.
Meet the tenant on site to inspect the premises together. As part of that process take plenty of photographs around and in the premises to record the state of the tenancy at time of handover.
Give the tenant a set of ‘fit out guidelines’ that control the building activity that is likely to happen in the premises. Those guidelines should also contain the plan approval requirements and the specification of materials and finishes to be used in the premises.
Give the tenant a set of ‘building rules’ that tell them exactly how things happen in the property. This strategy is wise when you have a building with a number of tenants. They all should occupy to the same set of rules. That will include access, common areas, security, property use, and risk management.
Note the condition of the premises in a ‘condition report’ that the tenant should sign at the end of the inspection. Give them a copy and you keep a copy on file. The report will be important at the end of lease term when the make good is under consideration.
Tenant fit out works should not commence until all the required plans and approvals have been obtained. This then says that you should get the plans and drawings from the tenant to submit to the landlord. If the landlord approves those plans, they can then be submitted by the tenant to the local building approvals authority. Fit out work should not commence until the approvals are in place.
Put the tenant details into the directory signboard system for the property.
Whilst the tenant is completing their fit out they should not disrupt other tenants nearby.
When the fit out has been completed, inspect the premises to ensure that the works undertaken comply with the approved plans and drawings.
Get a full set of tenant plans after the works have been completed.
You can add to this list based on the property, the landlord, and the tenant. Create your checklists to help you with all of this tenant movement.
When it comes to your career as a retail leasing expert, market knowledge will help you greatly when it comes to market share and market dominance. The retail property market is quite specific and special. There are many factors to consider and be aware of the as part of the specialized leasing task.
Retail property today is experiencing some challenges. The shifts in retail spending and due to the pressures of the Internet are quite apparent. There are also other pressures on retail that apply due to the global economic downturn.
That being said, retail spending doesn’t disappear, it just changes. That is why a retail property experts and particularly leasing specialists are perhaps some of the most skillful in the property market. They know what works and what doesn’t.
Here are some factors that require constant attention as part of servicing the retail leasing industry and shopping centers today.
It is wise to have a solid awareness of the significant and larger retail properties across your region. They will have pressures of change, refurbishment, expansion, and contraction. Those pressures will have influence on nearby competing properties and the movement of successful tenancies between each.
Franchise groups are now on a significant part of retail property performance. In many respects, they require occupancy opportunities in certain locations and property types. It pays to keep in close contact with the franchise groups for this very reason. They will have critical criteria that must be satisfied when it comes to a new tenancy and property occupation. They will usually share this information with the other retail leasing experts that could assist them with finding another tenancy. It is all so common for those retail groups to provide their own special lease documentation. Whilst this is convenient, it also has some concerns for some landlords. If you are involved with a lease negotiation of this type, the landlord for the property (your client) should have a good property solicitor acting on their behalf in the scrutiny of the franchise lease document. In most cases, the franchise lease document will coincide with the terms and conditions of the franchise business agreement struck between the franchisee and the franchisor. Landlord flexibility is required to make this balance work.
Rental strategies in retail property will vary from property to property and location to location. The rental for a tenancy is simply not just the commencing rent. It is a combination of many things including the commencing rents, the rent review profile, any lease incentive, and outgoings recovery. The right combination of these things will help improve the occupancy for the tenant and the landlord.
In any retail property, the tenancy mix will be important to the stability of occupancy and relationships between tenants. In larger shopping centers, this problem manifests itself in many ways. It pays to consider the clustering of tenants in zones within the property. In this way you can build on the sales relationships between like tenants in the cluster.
Retail leasing experts will usually spend significant time in the marketplace reviewing the performance of nearby properties, and meeting with retail tenants. These factors will produce market intelligence and feedback that allows the retail leasing expert to bring experience and relevance to the clients that they act for.
In commercial real estate sales and leasing, the process of setting goals will help you stay on track in your personal business and marketing plan. In this property market one thing is certain, everything changes quite frequently. For this very reason, a good goals focus system will help you maintain your momentum to the market share and commissions that you require.
When the property market is slow and tough, it is very tempting to absorb the negative comments of underperforming salespeople in your office. Excuses are very common in this industry. It is best to shut out these people from your business practices and your social activities. They can offer nothing to your end result as a professional commercial real estate agent.
Here are some tips for setting stimulating goals that can drive your business ahead.
Understand the market that you serve both geographically and by property type. When you narrow your activities in this way, you can be far more specific in your marketing efforts.
Look into the history of the area over the last few years. Make sure that you are working on the market segments that are attractive and active. Also make sure that you are specialising in a part of the market that is growing and vibrant.
Your goals should be specific to your end result. That will normally be commissions, listings, closed transactions, and active clients. All of these things are personally controlled through your prospecting efforts. On that basis you should build prospecting into your daily diary activities.
Given that our industry changes so frequently, set goals for a period of 12 months that are quite specific. Beyond 12 months is almost like a wish list where the goal posts will change subject to property market conditions.
When you set goals for the period of 12 months, they should be reviewed on a weekly and monthly basis. In that way you will know if progress is being made, and on that basis you can make adjustments.
Measuring your success towards your goals should be achieved through ratios and results. In the first instance, you will need to know where you are right now. That is in the number of listings, commissions, and percentage of market share. Beyond this current point, everything will be an improvement.
One of the biggest problems in setting goals is that most people will forget the process after a short period of time. Other issues take over and daily events become more random. If you want to proceed in this industry, your goals become points of the compass to keep you on track to your business plan.
Selecting a tenant in a commercial or retail property can be a challenge. Vacancies can occur within the property from time to time throughout the year. Some of those vacancies will be expected, whilst others will be the result of a tenancy default.
When you manage or lease a commercial or retail property, it is wise to incorporate a lease management and tenancy mix strategy into the property business plan for the property each year. The lease management plan will help you when it comes to finding and negotiating with new tenants to the property.
Given that each particular property is unique, and every landlord has special priorities relating to their property investment, the selection of a tenant to fill a vacancy is quite important. Here are some tips that can be applied to selecting a new tenant for your commercial or retail property:
In an ideal world, you want the tenant to be of good quality and high profile. The tenant of this type will bring stability and benefits to the overall tenancy mix. Other tenants in the property can benefit from a new high profile tenant entering the property precinct. For this very reason, franchise tenants and the associated branding they take with them will be quite desirable in the tenant selection process.
The landlord for the property should be encouraged to establish a standard lease that matches their property intentions and property investment. This lease can then be easily used when you negotiate with a new tenant. It should be noted that many solicitors acting on behalf of property clients do not understand the property, its location, or its functionality. Encourage the client’s solicitor to visit the property first before any standard lease is put together.
The age of the property and the intentions of the landlord will have impact on the refurbishment and renovation activities to occur. The lease for the tenancy should be prepared with due regard to tenancy renovation, and property refurbishment. It is not unusual to ask the tenant to renovate their tenancy every three or four years as part of occupancy. A condition can be placed in the lease to this effect.
Any tenant seeking to occupy vacant premises should be able to provide some history occupancy in another property. It is desirable to talk to other landlords or property managers to ensure that your intending tenant is of high quality. If on the other hand the tenant is a new business, then you will need to satisfy yourself when it comes to business stability and long term occupancy. When that is the case, the form of guarantee or bond that you use in the leasing arrangements will be quite important.
The prevailing market conditions will have impact on market rentals, rent reviews, and lease options. It may also be the case that a lease incentive will need to be provided to attract a tenant to the vacancy. Assessing market conditions will therefore be critical to the leasing negotiation and finalization.
Every commercial or retail property will have standards that apply to hours of trade, and terms of occupancy. They in turn will have impact on property access, security, customer access, and operational costs. Any property that is closely geared to higher traffic flow such as that in a retail shopping centre, will have higher property operating costs to consider and structure into the lease rental.
When you create a good lease for a property and the landlord, it strengthens the overall investment for the long term and helps the property sell if and when that is to occur. Taking shortcuts when it comes to lease documentation will reflect badly when it comes to property performance and tenancy mix stability.
If you want more free tips for Commercial Property Agents you can get them in our Newsletter on this site.
When it comes to leasing commercial or retail real estate today, there is a distinct timeline to the process that should be optimised and driven by the commercial agent or realtor. Failure to drive the process can see the landlord or the tenant slow the entire process down. When the property market is tougher like that of today, a slower lease transaction is not a good outcome for any of the parties.
As a special note it is worthwhile observing that many a solicitor working on the part of the landlord or tenant will also be a source of slow action or response. Yes, I know solicitors are busy people, but the landlords lease document and transaction is really important.
So here is a timeline to develop and use in the marketing and leasing of commercial or retail property today. These are the main issues to consider in leasing, and you may be able to add to the list based on your location and property type.
Inspect the premises to be leased so you really know the features of the property and just how you will take people around the premises. A well-considered inspection process will help in negotiations and conversions from initial enquiry to the creation of lease.
Remove any hurdles or presentational issues in the property before the marketing starts. That may mean renovation and carpeting or similar upgrades.
Define the target market for the property to be leased so that you really capture the right people from your marketing efforts.
Establish a targeted marketing campaign to attract the right enquiry. As part of that process, choose the right factors that help you promote the property on the internet and in the newspapers. What features exist in the property that will help lease it?
Get a signboard on the property early in the marketing campaign to send the message to all the local business owners and property investors. When the signboard
goes up, take brochures to the local nearby businesses to spread the word about the property availability.
Qualify the tenants coming off the marketing efforts before you show them the property. The same rule applies when someone rings you off an advert in the newspaper or on the internet. Ask the questions; in many cases the call may not be genuine and could be competitors seeking information.
From a good property inspection, any lease negotiation should be evidenced and initiated in writing. This will be by way of a well-constructed letter of offer or lease agreement. Get the parties to show their intention on paper. As part of that process ensure that you get a good deposit commitment from the party making the offer. That should also include an agreement to provide a bond or band guarantee to the landlord as part of taking a lease from the tenant.
If agreement is reached between the parties to do a lease, then documents should be prepared quickly by the landlord’s solicitor. There should be a follow up process to ensure that the signing of the lease can occur quickly and effectively. Add to that the necessary paperwork and deposit or rental money and you have a complete cycle of lease.
When all factors of the lease agreement are correctly actioned by all parties, then and only then should the keys to the premises be made available to the tenant for fit out works to commence. As part of that, the landlord should be approached to obtain the approvals of the new fit out construction and configuration.
So there are a lot of things to do here. Be well prepared and use a checklist to the process. Your leases will then be more effective in both negotiation and completion.
When it comes to managing commercial and retail property, it is very important to optimise the income for the landlord. The income for the property should be looked at both individually with separate leases, and across the entire property and the tenancy mix.
At the beginning of every financial year, there should be some form of budget created for the tenancy mix and the potential property income. All of the leases currently existing will have rental strategies and rental increases to merge into the income budget. This income budget can be incorporated into the business plan for the property for the upcoming year. The best time to do the budget is in the months of April and May, just prior to the beginning of the financial year.
Here are some tips relating to income optimisation in commercial or retail property management:
Always allow for some measure and method of adjustment given that the property market is always changing in your local area. When you set a property income budget, it should be reviewed on a monthly and quarterly basis. Any established trends in the local area should be tracked and then be used as a form of rental adjustment for the landlord if those trends are firm and established.
The vacancy factor in your local area will change based on the supply and demand of available property. To monitor this process, you should track down the changes to the property development plan in the region. Look for any new developments that could have an impact on your property. Those new developments will have a timeline of construction and occupancy; it is likely that those developers will also have an allowance for rental incentive to attract tenants into their property. That incentive will have an impact on your property leasing strategies.
Market rentals will change from time to time. They do not always go upwards, and more commonly will stagnate or slightly reduce when the property market slows. To help you with the levels of market rental, you will need to understand the impact of incentive in the market rental structure as it exists today. If an incentive exists in any market rental negotiation, it creates what is called a face rental. That face rental will be discounted by any property valuer back to a level that is truly aligned to the effective rental and the market. Incentives create a false level of rental.
Business sentiment will change from time to time based on the local and regional economy. Some business segments and business types will be more active and successful than others. Track those business segments and monitor the needs for property change or occupancy. Some of those tenants could be relocated to your property if the opportunity arises.
Existing tenants in the property should be categorised into long-term tenants and short-term occupants. Some tenants will be more attractive to the landlord and the performance of the property over time. They may have a tenancy profile or business identity that encourages other tenants to the property. Reviewing the tenancy mix is called tenant retention. You can create a tenant retention plan as part of your business planning model.
Pressures of expansion and contraction will change from time to time with all other tenants in your tenancy mix. Look for those changes, and keep close to those issues through the business year to identify any pressures of change that may need to be accommodated in the building. It is better to have a tenant in your property that you understand and appreciate, than find a new one that is unproven and costly in occupancy changeover and leasing costs.
The income for a commercial or retail property can be enhanced when you fully understand all of the above factors and adjust the property accordingly. It is not unusual to adjust the business plan or for a property three or four times during the financial year.
When you take on a new property management listing, one of the key things that must be done very soon is a lease audit. Without a lease audit you really do not know what you have in the tenant mix and how the property is performing with the existing tenants. Here is an article from our bulletin for Commercial Agents.
The audit process will help you understand big and important issues including the following:
Tenants by name and location
Rental conditions from the lease
Upcoming options and rent reviews
Arrears and current rent charges
Risk and Liability that can apply to each lease
Tenant and Landlord covenants that must be complied with
Special terms and conditions in the leases that could apply to the tenant or the landlord
Permitted use provisions of the premises, etc
So, the audit process will tell you a lot about the property and its current status. Checking leases against the events that are applicable to the tenants now will let you know if all lease matters are up to date.
It is interesting to note that far too many property managers will accept the detail of a tenancy schedule without checking the leases for each tenant. It is so common to find that tenancy schedules are not up to date or are incorrect. That then is a recipe for disaster and errors with the property.
Here are some tips to do a lease audit with your new commercial or retail property management appointments. You can add to the list so you create a checklist that can be used over and over as you bring in new properties to manage.
Inspect the property so you understand what it looks like and just where everything is.
Make a list of tenants as you inspect the property, so you can cross reference that information later from the leases.
Get plans and drawings of the property that show you the layout of the common areas and the leased areas.
Check out the boundaries of the property so you know what other businesses or property owners are adjacent. Look for any issues of conflict in boundaries and property usage.
Go through all the leases with reference to the information that you gained in your property inspection.
Create your list of information from the lease review, with particular attention to rent reviews, options, end of lease dates, tenant names, locations, and rentals paid.
Get an up to date list of rent payments for each tenant.
Check for arrears with each tenant.
Split the rent charges into rental (all rents for the premises), outgoings, recoverable charges, and any other miscellaneous charges.
Look for supplementary information and documents of occupation such as naming rights, car parking, common area usage, storage, and other charges.
All of this information must be cross referenced against what you see in the property, the rent invoices today, the discussions that you have with the tenants, and the handover information that you may have been given by the previous property manager or landlord.
When the property market slows or changes, you need to develop specific strategies for finding new tenants in commercial and retail property. Specialist leasing agents have ongoing tenant connection strategies for this very purpose. Here are some tips from our bulletin for Commercial Agents.
As business and economic cycles change, tenants will come and go from the local business community. Importantly you really do need to understand the changes and opportunities that are occurring locally.
Regular contact with business leaders and business proprietors will give you greater leverage in future tenant placement and lease negotiation. Every day you should be talking to more tenants in the local business community. Once the door of contact has been opened, it is wise to speak to these business leaders at least once every 90 days. Potentially they will at some stage require some property assistance and a new lease or lease occupancy.
Here are some strategies for finding new tenants in this property market. Given the volatility of your business community and local area, you can add to this list as appropriate. The resultant checklist becomes very powerful in finding the right tenants for the right property when circumstances require it.
When it comes to a particular listing that has remained vacant, check out all other adjacent properties in the local area. There will be successful businesses nearby that may need to expand premises for a particular business reason or business unit change. Use your current vacancy as a reason to talk to other local business proprietors nearby.
The local accountants and solicitors are a good source of business intelligence and leasing change. They work with the successful business proprietors needing property assistance and property adjustment. They are more likely to know those local businesses that need leasing help over the coming 12 months. If you can establish your reasonable level of trust with these professionals, you will find leads and opportunities being fed back to you. The way to open the door here is to provide local market information relative to commercial and retail property. Regular contact will see the levels of trust being established.
The business franchise groups in your city may have a need for another business location. Check out all the franchise groups and understand who their property decision makers are. Speak with them regards the typical property needs that apply when they lease new premises. Also ask them for a summary of the standard terms and conditions that apply in any new lease negotiation. These facts will help you with positioning and negotiation with your landlord clients and their properties.
Some tenants need to consider expansion or contraction of the business operation. On that basis you can be contacting the business proprietors throughout the local region. When they get to the last 18 months of their current lease, they are quite likely to be receptive to discussions on the current property market and lease or rental issues. Providing them with a monthly update on the property market is a sensible strategy.
Check out the decision makers in all the large local businesses. They are likely to be looking for property change, expansion, contraction, or investment from time to time. They may also purchase a property for future expected business needs.
Understand the lease renewals and lease cycles that apply to all the major properties in your local area. Tenants will seek local property information before they make choices regards moving or relocating. Constant contact is part of the process to open the door on a potential new lease.
Look for sale and lease back opportunities with those businesses that own their premises but want to release some capital from their property ownerships.
It is quite possible to find new tenants even in the toughest of property markets. The process requires strategy and system on the part of the leasing specialist.
When the property market appears slow and sluggish, you really should look at it in reverse understanding that you have an abundance of quality listings to put to the potential tenants looking to change location. Lease opportunity is always out there and will be a great source of commission when sales slow.