Finding tenants for your vacant buildings can be a real challenge. The fact of the matter is that most new tenants will come from the businesses in your local area. On that basis the direct personal approach to businesses tends to work more than anything else.
To be successful in commercial real estate leasing it is best to focus on the local business community and the movements that come from there. The best marketing approach for any vacant tenancy or leasing project should be biased towards the local area. This then says that the best marketing campaign can be structured around some of the following local strategies:
- Determine the ideal target market that best suits the property
- Get a signboard on to the property as soon as possible
- Personally canvass it of the businesses in the immediate location
- Circulate simple brochures into the business postal delivery service
- Review your database for any previous leasing enquiries that may not have been satisfied
- Identify the best buildings in the general precinct that may have tenant volatility. Approach the tenants in the building to see if they are looking to move.
The leasing process will always be far more successful when you orientate it towards local businesses and local properties. Your database should contain several hundred local businesses and decision makers for those businesses.
Approaching local businesses
When it comes to the occupancy of a property, local businesses tend to maintain a local focus so that they do not lose their customer base in any property changeover. The fact of the matter is that they want comfortable occupancy at a reasonable rental.
In approaching the local businesses, the following questions and strategies will help you in gathering the right facts and building on the correct opportunities.
- Are they a tenant in occupancy or do they own the property?
- If they are the tenant, ask them some questions regarding the current lease. Most particularly the expiry date of the lease will be of great value to you, and any renewal intentions that they may have.
- Are they under any pressure to expand or contract leased area at the moment? Some businesses simply outgrow their property for one reason or another.
- What can the tenants tell you about their landlord? The detail that you get here could be useful in the future when it comes to looking for commercial properties to sell.
- What does the local business owner think about the local area from a leasing and business angle? Are they aware of any businesses that may be seeking change?
Simple questions like these can help you build a great database of future opportunity in leasing premises locally. Take action today and get out into the local business community. Make them part of your prospecting model.
When it comes to leasing a retail property, the leasing specialist must be a real expert in the retail property type and the strategies behind tenant selection and tenant mix. In a retail property today, it is not simply a matter of finding a tenant and creating a lease; the right tenant must be found for each and every property. Many variables come into consideration.
A well selected tenant for a retail property will do a lot for the factors of property function and performance including:
- Underpinning market rental for the landlord and as an investment property
- Minimise vacancies in the property for the long term
- Build on the success of tenants in the property so that the investment property can be expanded or sold on at a reasonable capital gain
Given all of these above factors, a retail leasing ‘expert’ is a special person that understands the leasing process and retail property performance to a high level.
Here are some factors that can help you in gaining this level of retail property expertise:
- Retail leases are documents that are built around strategy of rent, lease terms, and tenant mix. In many respects, you do not want one lease to negatively impact the occupancy of tenants around it and in the same property. That is why knowledge of tenancy mix becomes so important.
- Rent levels and lease incentives will change throughout the year given the overall location and the property type. Monitor these changes and watch the rental levels.
- The levels of tenant enquiry will change during the year. Some of that enquiry is quite seasonal and should be identified as that. It may be that a property should be leased at a particular time of year as opposed to a time when the market may be slower given sale or market trends.
- In retail property you should watch for other property developments that are soon to be coming on the market. They can have a major impact on rental or incentives that are being offered. In many respects those other properties will be attracting some of your tenants to relocate.
- Franchise tenants are becoming an important part of many retail shopping centres and the particular tenant mix. In many respects, particular franchise tenants will be very desirable for certain retail properties. Get to know the franchise tenancy groups that operate in your area or that could require new premises in your area.
- Anchor tenants are an essential part of the structure of a major shopping center. They also have a role to play when it comes to smaller retail shopping centers and neighborhood centers. The selection of the anchor tenant will be based on the demographics of the local customers visiting the property.
- Tenancy mix strategy will vary from property to property. The age of the property, the existing specialty tenants, and the intentions of the landlord will all have impact on the tenancy mix. In many respects, the proximity of one tenant to another in the same property could have major impact on the stability of the market rental, the sales for some of the tenants, and the visitations of the customers. Clustering is a factor that applies when it comes to retail tenancy mix. Some tenants in a cluster can enhance the sales of nearby tenancies. That is how strategy and tenancy placement comes to the fore.
Retail property experts and leasing specialists tend to understand the leasing process very well and can analyse the performance of the property from that.