In commercial real estate today, the leasing process is a significant opportunity for brokerage fees and commissions. That being said, leasing opportunity can be optimised through understanding the market and the requirements of tenants today.
A good leasing agent will maintain significant ongoing contact with the business community, tenants in occupancy, and landlords. A professional leasing specialist will usually have several hundred tenants in their database. Over time the ongoing contact with those tenants will help with leasing opportunity. A good database of tenants will give you leverage when it comes to attracting landlords with quality properties to lease.
So the basic strategy behind attracting a lease transaction will be for you to work with available property activity including the following variables:
- The needs of expansion for particular tenancies
- The needs of contraction for local businesses
- Relocation requirements relating to business activity
- That need to reduce or control occupancy costs
- Tenants that find it difficult to work with the landlords
- An upgrade of property type to provide a better business image
- A tenant looking for the benefits of a new lease incentive as part of changing premises
- Landlords looking to resolve upcoming vacancies
- Landlords undertaking a property expansion and change process
- New properties coming into the market providing project leasing opportunities
- Sale and leaseback opportunities with existing businesses
It should be said that quality vacant listings will always attract solid leasing enquiry. That assumes that the rental and being asked is in line with prevailing market conditions. Any rent that is negotiated today can be shaped and improved over time through a well-structured lease document. Lease terms and conditions can be improved through the negotiation process on behalf of your client.
To encourage a lease transaction, the overall package of rental, occupancy costs, and lease terms need to be well considered and structured. As the local leasing specialist, take the time to understand the changes in the market, the requirements of tenants, and the supply of available space. A successful transaction is a reflection of all three factors. You can be the facilitator of a successful property transaction.
It should be remembered that a successful leasing transaction can always open the door to a property management appointment or a future sale opportunity. Asking the right questions and staying in contact with the right people will help with those matters.
If you have chosen this segment of the market as your speciality, there are some basic rules to be remembered. Here are some of the most important ones:
- Quality properties will always lease faster than average ones. For that reason, your prospecting activities should be focused on the best properties in the region.
- Ongoing tenant and landlord contact will be a daily requirement. Spend at least 3 hours per day talking to tenants and landlords in the market. You can get a significant volume of market intelligence through this process. Tenants will usually know more about the local market than you do. They will know about those other businesses that are looking to change and move.
- The tenant advocacy process offers significant leasing opportunity. That being said, it is best to focus on quality tenants with established businesses. You can also focus on the larger properties as part of that process so that the fees generated will be significant for the amount of work involved and the area under lease. Small properties and small tenancies can be a large amount of work when it comes to finding a tenant, and closing on a deal. Recognise the opportunity of working with better properties and larger areas.
- Look at the rentals that apply to the average lease transactions within your town or city. Rentals are usually quite high when it comes to retail property. Office property rental will usually be reasonably high for the volume of area leased. At the bottom end of the scale, industrial property will offer a lower rental per unit of area. On that basis the fees can be similarly low unless you are leasing a very large industrial property. So you have some choices to make when it comes to your choice of property to lease. You should also select the best regions to focus your leasing activity within.
There are always good properties to lease in most towns or cities. Balance the rental to the prevailing market conditions, and the needs of your client, be they the landlord or the tenant. You can certainly build a good career in the property industry focusing on leasing opportunities.