Tag: better tenants

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Traps to Look for In Listing Commercial or Industrial Property for Sale or Lease

Many agents specialise in just industrial real estate, be that sale or leasing.  That focus can be a good thing because the industrial segment can be quite unique when you consider the factors of large manufacturing and warehousing.

When you are listing a property that is industrially zoned or perhaps already has an industrial use, you need to get to the key issues of the property and how it relates to other industrial properties locally.  Comparisons will help you understand future opportunity and marketing potential for the asset.

Important Facts to Investigate

Here are some factors to investigate when assessing the potential of an industrial property from a sale or lease perspective:

  1. Zoning – There are differences in industrial zoning, and therefore the types of work, manufacturing, and or business that can be generated in an industrial site or warehouse. Check out the zoning regulations that apply to the location and the listing; understand what types of business and manufacturing can occur on the property.
  2. Orders or Notices – Some industrially located properties are impacted by factors of the environment and location. Ground water, soil toxicity, topography, and stored or manufactured chemicals are just a few factors that will impact the use and or occupancy of the property.   Ask about orders or notices that may have been issued to control the way things happen in the property.
  3. Warehouse and building floor area – There will be locations in the property that are used in a specific way. The configuration of those particular areas may suit or typify the standards of a particular industry; that means some of those areas could be redundant to the next property occupier.  Review the areas and understand them.  Typically you are looking at the spaces relating to warehousing, office, laboratories, storage, power plants, machinery, production, loading bays, and hardstand.  There may also be special requirements associated with the certification of plant and equipment such as cranes.
  4. Warehouse size and construction – Storage of goods today involves pallet stacking, forklifts, floor loading, and staging areas. Every industrial business will have factors that are quite special in the way they receive, move, and store goods.  Clear span warehousing will help with the logistical factors of goods movement, pelleting, and storage.   Modern warehouses tend to incorporate clear span design.
  5. Access – Most industrial businesses today require truck access and special loading and unloading facilities. The efficiency of the moving of goods can be a big part of cost control and customer service for any industrial business. A large loading dock and infrastructure will be helpful for many occupants of business types.

Given all of these things, a good industrial property will be situated in a location that is well supported by service infrastructure such as electricity, gas, water, roads, rail, and airports.   Why not do your full property assessments before you decide on the best way to market the industrial property to attract potential buyers and tenants?

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How to Prepare to Lease a Vacant Office Premises

In commercial real estate today, the leasing of office premises is a relatively easy process to prepare for but accurate facts and property information are required.  In many respects you will only get one chance to promote a vacancy for lease; have all the facts and information under control from the outset.

Real Estate Leasing Agents should help landlords move through the tenancy and property preparation issues so that the marketing of the vacancy can create real interest in the local area and with the targeted group of tenants.  When you are prepared for the lease activity, time on market is shorter and lease negotiations are more direct; in larger office properties and in modern buildings you will also require a ‘tenant information memorandum’ to assist the leasing process.

Here are some tips to help that leasing preparation process occur efficiently:

  1. Get a plan created of the property and or the tenancy to be leased.  You may also require a survey plan so that the lease area is totally accurate in preparation for tenant inspection and enquiries.  If that is the case, get the survey done early so it is not a delaying factor in any lease negotiation.  It is also of some help to the leasing agent to have an accurate plan of this type for the property and premises.  The plan creation process is a cost to the landlord.
  2. Check out the boundaries of the premises and property; inspect the property comprehensively yourself.  Ensure that there are no boundary or premises encroachments.  Remove those problems before any lease marketing or negotiations start.  Premises problems can slow things down considerably in a lease negotiation.  Remove the problems at the start.
  3. Review the premises from a ‘tenant perspective’.  Look at issues as any tenant would.  Question things such as rent levels, lighting, floor coverings, wall finishes, lease conditions, and property availability.  The property must present well in any inspection, so remove any visual problems and physical challenges that could have an impact on your inspections.  Any problems that a tenant can see in the inspection are likely to be ‘discounting factors’ in any lease negotiation.  Some landlords like to ‘hold back’ on the costs of premises preparation thinking that they can save some money or wait until a tenant is located; invariably that can be a big error as the ‘first impression’ that a tenant gets from the property will make or break any lease offer.
  4. The landlord should have considered and created standard lease terms and conditions that are required for any lease negotiation to start.  Those facts will also be required in the marketing and advertising of the vacant premises.  Ensure that the asking rent is in keeping with the comparable properties locally and the other asking rents in the area.
  5. Understand how the tenant will connect into the building services and amenities.  That connection process will include water, lighting, electricity, drainage, and communications.  There will be ‘risers’ in the building to allow the tenant to connect.  You may also need engineering comment and ‘as built drawings’ to help that process occur.

Simple things like these help the momentum in any lease marketing process of an office building or office premises.  Preparation is the key.   Get the facts before you, know the property market, and then understand the client’s requirements and the property.

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Create a Rich Source of Tenant Leasing Needs in Commercial and Retail Property

When you work in commercial or retail property leasing, you need a rich source of tenants and business leads.  There are a number of resources that you can use for that purpose, and on that basis it is simply a matter of selecting the ones that work for you and your property market.  Develop your leasing strategies.

Here are some of the best leasing sources of business names and tenant identities:

  1. Check out all of the major buildings in your leasing territory.  When it comes to buildings that contain multiple tenants, it is a matter of taking down or capturing the details from the directory board that is located in the property.  The easiest way to do that is to take a photograph of the directory board on your mobile telephone.  You can process and review the photograph later.
  2. From the details that you get in the previous ‘directory board’ step, it is a matter of telephoning down all the businesses in the particular buildings to discuss future leasing and occupation needs.  Leases come to an end at some stage for all types of reasons.  Some tenants prefer to move when that occurs, and on that basis you can be the source of market information and relocation opportunity.
  3. Get a copy of the local business telephone book as it applies to your location, town and city.  It is preferable to use the telephone book in hardcopy rather than online.  That is simply because the telephone book can be logically processed and marked off with a colored pen or highlighters as you proceed through it.  Starting at the beginning of the telephone book work through every business name to find those businesses that are located in your priority suburbs and leasing territory.  Whilst this process may seem tedious, it is simply a matter of reviewing one or two pages of telephone numbers each night in preparation for your prospecting processes the next day.  One telephone book can take you an entire year to move through.  You will however see that the system is quite easy to implement and soon you will be covering 5 to 10 pages a day as part of that process.  One page of the telephone book should give you two or three numbers to call; cold calls lead to information and potential meetings with the right tenants.  You may wish to choose a greater number of businesses given the filtering process and the criteria of targeted tenants locally.
  4. You can also get some good leads and opportunities from using the Internet methodically and specifically.  In your town or city, there will be a business ‘Yellow Pages’ telephone book online that you can use for this very purpose.  In most cases you can search the ‘Yellow pages’ based on targeted business types and by suburbs.  From that search process you can get specific names of businesses and tenants to put into your prospecting activities and cold calling systems.

So these four strategies are quite simple.  You can see why things need to be methodical and systemized.

When you create a large list of local businesses and tenants, and then take the time to understand their occupation needs from a leasing perspective, you are of high value to the landlords that you serve.  Use your database as leverage in this way when it comes to winning a property leasing appointment.  Tell the landlord about your database and how accurate and up to date it is.  They will find it difficult to ignore an agent with a comprehensive and up to date database of tenants.

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Talking Shop with Commercial Real Estate Leasing Brokers

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.