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The Essential Strategies to Follow in Commercial Real Estate Leasing

As you consolidate your career in commercial real estate brokerage, there are plenty of opportunities to be had across the segments of the leasing market. There will usually be a good selection of local businesses, landlords, and tenants struggling to resolve occupancy issues.

 

If this is the property market segment for you, then consider how you can boost leasing inquiry and provide professional services to both landlords and tenants. There are some critical steps to the process to help you build your leasing momentum.

 

Leasing Facts

 

Let me set the scene here in your local area:

  1. Some tenants are looking to relocate due to pressures of expansion and or contraction.
  2. Some landlords have vacancy issues and pressures to deal with. Look for the vacant properties and then talk to the landlords directly.
  3. Some properties are quite complex in tenancy mix and occupancy. The larger properties are likely to have an array of leasing challenges including variable market rentals, upcoming lease expiries, and a changing tenancy mix.
  4. Market rents are changing in your town or city. Track the market rentals that apply to the different property types and precincts.
  5. The factors of supply and demand in the local area will shift occupancy rates and market rentals. Look for the local developments that could influence future supply and demand. Adjust your marketing efforts based on the upcoming changes to occupancy supply and demand.
  6. Many tenants today are looking for improved conditions of occupancy and better buildings. In talking to the tenants locally, you will soon identify what they are looking for in any new occupancy.
  7. Some landlords are overly aggressive when it comes to market rental negotiation. The landlords that push the levels of occupancy and rental recovery are usually the landlords that lose tenants over time. They are likely to have higher vacancy factors in their investment buildings.
  8. Many tenants are looking for improved factors of economy and cost when it comes to lease occupancy. Understand how you can bring factors of occupancy cost improvement into the tenant lease negotiations. Market rentals, outgoings costs, and rent review processes are ways of achieving a better rental package for the tenants that you serve. If you work as a tenant advocate, this will be a big part of your professional advocacy services.
  9. New projects are coming onto the market, and those projects will require a professional occupancy and leasing strategy. Many project leasing opportunities are quite large and can take months if not years to complete. If this is the type of work that you are focusing on, then be careful when considering commission charges, marketing costs, and resources to be applied to the project. Many developers will look for lower levels of commission and minimized marketing costs. They will be looking to offload many of the project leasing costs to the marketing agent.

 

All of these things are happening in most cities at any given point in time. They are all related to leasing and property performance. You are the best person to help resolve these challenges.

 

So here are some of the rules that you must follow to improve your professional profile as a top leasing agent:

  1. Concentrate on the market segments that have the best levels of churn and opportunity. There will be certain property precincts and buildings in your town or city that are higher on the selection list for new tenancies and new tenants. Work the buildings, the landlords and the precincts that have the best opportunity for change and churn.
  2. In talking to local business owners and tenants, adopt a checklist approach to understand where their business is located now, what they may need for ongoing successful business occupancy, and when their current lease may expire. When talking with decision makers, understand the pressures of today that they may be experiencing, and how they are looking at their future in the location. Show them the economies of the area that could influence their choices to relocate. Most business owners and tenants will be attracted to factors of efficiency and economy.
  3. Track the market rentals that apply to the property types and the precincts. When any new lease transaction has been completed, seek out the facts relating the finalized lease, and the agreed rental.
  4. When focusing on new properties to lease, bias your activities towards the larger properties, the quality locations, and the good quality buildings. In that way you will achieve a higher level of rental and better levels of interest as you market the vacancies.

 

So these are all strategic issues that can easily be applied to the tenant and landlord leasing services locally. Understand the factors of attraction in the local commercial real estate leasing market. Work the factors of attraction through your prospecting and marketing processes. The better buildings, precincts, and market rentals will always attract good levels of quality inquiry. Work with your landlords and tenants on that basis.

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Branding Solutions for Commercial Real Estate Leasing Agents and Brokers

In commercial real estate leasing you want the tenants and landlords to remember you as a leasing specialist, and thereby use you at the times when they have a leasing challenge.  On that basis you really should know lots of people locally that own or occupy investment properties. Your database should be the lifeblood of leasing commissions and vacancy opportunities. Your brand and your image should feature in your professional leasing marketing plan.

 

You want the tenants and the landlords in the local area to remember you as the industry specialist at the right time and in the right way. The best agents and brokers have a reputation for resolving leasing challenges effectively and directly. The understand how to shape the lease and rental transactions for the best outcomes possible for their clients.

 

Whats happening?

 

Consider the leasing market over the last 12 months. Think about how the rents have changed and the enquiry rates similarly so for the different property types. Somewhere within that change and churn you will have the opportunities for tenant placement and vacancy resolve.

 

The local leasing market will always be under change and churn, and the commissions can be found when you tap into the changes in the property market.  Rents will alter, as will the vacancy factors throughout the year.  An active leasing market will have plenty of opportunities for commission growth. Look for the tenants that need help when it comes to occupancy and premises expansion or change. Ask the right questions, and comprehensively talk to all of the tenants through your business zone or precinct.

 

Know the tenants

 

So the message here is that you can and should talk to plenty of tenants each and every day. Understand what the tenants are thinking and doing when it comes to lease occupancy and rental intentions. Some of those tenants will need to expand or relocate their business operations. Other tenants will be coming to the end of lease occupancy and will be looking for better value from a rental and occupancy cost perspective.

 

The agent or the broker with a comprehensive tenant database will be of great value to the landlords that they serve. Market your leasing services accordingly, using your database as part of your lease listing pitch.

 

Your database rules

 

A good leasing agent will have several thousand local businesses in their database, and that database will be fresh and up-to-date. All of the tenants and business owners in the list will be contacted in an ongoing and complete way. Their leasing status will be changing in the database over time.  Track and measure the changes and the challenges of local tenants.

 

Here are some other ideas to help you build your brand awareness with the tenants in the landlords in your investment leasing market:

 

  1. Comprehensively canvass all of the local businesses within your territory – take an organized approach to buildings, streets, precincts, and property types.
  2. Connect with all of the landlords within the region – some landlords will have a valuable portfolio of prime properties to lease. Work with the landlords that have or offer the most opportunity for you over time.
  3. Offer specialized vacancy resolution services – develop some unique and valuable leasing services to help resolve vacancy challenges and local leasing requirements fast and efficiently. Tenant retention plans, tenant advocacy services, and lease negotiation services are all valuable services to offer to the local area and the people therein.
  4. Provide tenant mix strategies and clustering solutions – office buildings and retail shopping centers have unique challenges when it comes to tenant mix strategy and clustering. The mix of tenants in the building can make or break the growth in market rental over time. The types of tenants can also strengthen or weaken the occupancy within the building over time.
  5. Understand how to improve the value of a lease – a long-term occupancy can improve property cash flow and values over time. The rental structure can include variations in rent reviews, outgoings recoveries, and option periods. Think about how you can negotiate leases with due regard for your client and their investment circumstances.

So you have five ways here to help improve the leasing services that you offer locally.  As a direct result, your personal brand can grow in the local area with tenants and landlords.  That is the best way to build your leasing business.

 

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Commercial Real Estate Leasing Agents – Taking Effective Tenant Enquiry is Easy to Do

In commercial real estate brokerage, the tenant prospecting process is a good part of the leasing business where you can create plenty of leads and listing ‘churn’.  Tenants will tell you so much about their property occupation, the landlord, and the neighbouring properties and businesses.  Talk to tenants every day and you will find lots of new business leads and listing potential just waiting to be acted upon.

Local Source of Information

So it is a fact that tenants are very valuable to the commissions that you earn and attract as a broker or agent.  They are a huge source of market intelligence and business opportunity.  You can track them in your database.

As part of connecting with those tenants you really should have a thorough and complete questioning process that gets to all the key facts of their property occupation and any upcoming change requirements.  You can do that directly and effectively.  It’s easy when you know what to say and do.  You can develop a checklist to the process.

Get to all the tenant facts

Here are some of the main rules to the process:

  1. WHO ARE THEY?: Understand who they are from the outset of the initial approach or enquiry. Ask plenty of questions so that you know who you’re talking to and how to contact them again in the future.  If they will not provide you with the appropriate contact information, then limit what you tell them about the listing and or the property market.  Your information is valuable, and they should trust you from the outset of any conversation.  A tenant that does not trust you is likely to be concealing a few problems and or issues.  They are also likely to be talking to a number of agents in the location.  Spend time with the tenants that are open and honest in their conversations and communications.
  2. WHAT’S UP?: What do they have now? Understand where they are located currently as a business and what they may be looking for in the future.  Drill down on the facts of occupation including occupied area, business function, staffing needs, customer profile, lease terms and conditions, and landlord problems.  From some very simple questions you can understand where you can take the leasing enquiry and create the conversion that you need.
  3. TIMING?: When do they need to make the change? There will be some critical time frames that apply to the leasing and property occupation process.  Some businesses have a timeline to property change.  That timeline can be impacted by annual business cycles, industry trends, and financial cycles.
  4. SHOW ME THE MONEY!: Understand the budgetary constraints applying to the tenant and within the property type that they are targeting. Some tenants have very little idea about recent rental activity and lease occupancy within a location.  They may have high expectations when it comes to changing premises, but little understanding about the rental budgets applying to occupancy in the particular precinct or location.  Don’t forget to include in your review the appropriate levels of outgoings that apply to lease occupancy in addition to any rental strategy or budget.  The total amount of money will be something that the tenant should fully understand and comprehend before they start looking at properties.  Make sure they can afford the property that they are seeking.
  5. THE IMPORTANT THINGS?: Question the tenant about any specific property needs and conditions. Certain businesses have particular requirements relating to property use, security, communications, staffing, and customer interaction.  When you fully understand those specific and special needs, you can match the property more effectively.
  6. WHERE HAVE THEY BEEN?: Appreciate what property the tenant has looked at previously and currently. It is quite likely that they have been working with or talking to other agents and brokers in your town or city.  They will have seen other property listings and developed an opinion of the property market from that process.  Depending on what they have seen and when, you will need to adjust your property short list and inspection processes.

From these simple and yet valuable rules, you can take any tenant enquiry directly and effectively.  It is easy to do and when successfully undertaken will help you shortlist the required properties in the required locations.

You can get more tips for taking tenant enquiries in our eCourse Snapshot right here.

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Commercial Real Estate Leasing Brokers – The Additional Benefits of Working with More Local Tenants

If you are a commercial real estate leasing agent, you can get plenty of market traction if you work with local tenants and business owners.  They tell you things and that then leads to listings and better commissions with quality property transactions.

Always err on the side of leasing quality when it comes to any property listing or property choices.  Why is that?  Consider these things:

  • Quality properties create better levels of inquiry
  • The rents are higher per unit of area
  • The commissions are better due to the higher rents
  • The tenants are drawn to a quality listing
  • Modern buildings offer a level of improvement and services that most tenants require

What are the Leasing Positives?

There are some good things evolving from working in property leasing and resolving tenant needs.  Think about these:

  1. Leasing leads to Property Management – Many landlords are open to property management services when you have just solved a complex leasing issue for them.
  2. Leasing leads to Sales – A lease today is likely to be a property sale in the future, particularly if you do a great job for the landlord property investor.
  3. Tenants share local property information – Local tenants will tell you many things about their location and other nearby businesses.
  4. Landlords want help with tenant placement and tenant mix – Whilst a landlord may have a fully occupied property right now, many leases may be in need of upgrade and renegotiation at the right time in the future. As a general rule, weaknesses in leases can be negotiated away over time with better leases and rents.
  5. Rental and lease strategies are highly specialized – There are many different types of rents and leases; they can be mixed and matched to the investment requirements of the landlord and or the occupancy needs of the tenant (it just depends on who you are engaged by as a client). You can drill down into market rent strategies and leasing alternatives.  That will then make every lease negotiation more valuable for the clients that you serve.

So you can do a long way in the property market as a specialized agent or broker by starting from a ‘leasing base’.  Understand the linkages between the 5 points mentioned and build your skills and property market around them.

In closing on these points, recognize the differences between office, retail, and industrial property.  Understand the leasing opportunity in each property type, and then choose the segment that offers you the most market activity over time.

You can get more commercial real estate broker leasing tips in our ‘Snapshot’ eCourse right here.

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Commercial Real Estate Leasing Brokers – A Vacant Property is a Great Opportunity for the Long Term

Some of your commercial real estate clients will have vacancies in their investment properties to work through and resolve.  Those vacancies are a real opportunity for you the local leasing broker.  If you have a large database of tenants in the local area then you will have plenty of attraction and leverage to offer to local landlords.  Sell your professional leasing services from the strength of your database.

Ultimately the clients that you serve just want to get a tenant.  You can offer the best solution as part of that process.  Talk about the best tenant types that you see for the vacant premises and then offer the client a specific way to attract those tenants.   Here are some factors that you can drill down on as part of your client offering:

  • Presentation of the premises
  • Property improvements to strengthen promotion
  • Time of marketing to lift enquiry rates
  • Best promotional channels
  • Leasing alternatives
  • Rental structures
  • Incentives to offer tenants
  • Special advertising methods
  • Tenant mix strategies for the overall property
  • Rental improvement strategies

So the message here is that any vacant property or premises is a major opportunity for working with an investor for the longer term.  Don’t just let the single leasing requirement be the start and the end of the matter.  Look at how you can extend your services for the client.

Develop a leasing team in your office that can handle the leasing requirements in specific locations and across property types.  Ensure that the team can speak and present comprehensively into the rental and leasing market locally; that will mean across specific rents, marketing situations, leasing documentation, inspection processes, and negotiation approaches.

When you open the client up to the many extra leasing services that you can offer for the longer term, benefits arise for both you and your brokerage.  Try some of these for starters:

  1. Taking a property through a growth phase for a new renovation or project opportunity.
  2. Upgrading leasing services to a full property management appointment.
  3. Expanding the client’s investment requirements to other local properties and opportunities.
  4. You can be seen as the leasing specialist that is helping results happen over the lease duration and across the tenant mix.
  5. A good leasing outcome today can be a sales requirement in the future with the same client.

All of these things can lead to fee growth and diversity for the brokerage.  Comprehensive fees are driven from diverse leasing services.  Are you ready to lift your service offerings?