Exactly How to Lease a Commercial Property Today

Leasing commercial property is a special process.  When you understand the elements of the process, you can improve your listing conversions and lease negotiation outcomes.  Here are some tips from our Newsletter.

So the landlord of a property approaches you to see if you can help in leasing their vacant tenancy.  The inexperienced agents immediately accept the request with little further thought.  Top agents ask quite a few questions and get the right market information before proceeding.

Here are some tips on how to lease commercial property today:

  1. Get the facts about the property location and the landlord.  Check out the ownership detail on the title before proceeding.
  2. Inspect the property to review the improvements in the vacant area or tenancy.  Also look at the services and amenities that are available for the tenants that take up a lease.
  3. Get professional photos taken of the property so you have something to use in the marketing campaign.
  4. Get physical details about the tenancy and make sure you get some plans to review.  The best plans to get a copy of are the ‘as built drawings’.  They will be helpful to the leasing process and tenant layout when you find a tenant.
  5. Identify what landlord works should be done in the property before it is released to the market.  Presentation is really important today.
  6. Check out the comparable properties that have not leased in the local area.  What rents are being asked in those properties and how will they impact your property?  What can you do that is better and different?
  7. What are the market rents that apply to a lease of that property type today?  Give due regard to gross rents, net rents, and outgoings that will all need to be set before the marketing process for the property commences.
  8. Should the landlord offer an incentive to get a new lease going in the property?  If that is the case, do your homework on the size and type of incentives that are available in the property market today and with that property type.   Any incentive that is provided should be ‘paid back’ over the duration of the lease term.  It is your job as agent to know how to amortise the incentive back into the lease and the rent structure to get the landlord back the initial cost of the incentive.
  9. Establish a marketing campaign that is based on the target market for the property. Get the landlord paid advertising funds to cover for all the promotion of the property.
  10. Get an exclusive listing of the property so you can devote extensive effort to marketing.
  11. Draft advertising for the property and get it approved by the landlord before you proceed with the marketing.
  12. When the property is released for marketing, take details of the property to all the local businesses and property owners.  This is a personal thing and should occur on a business and door by door basis.
  13. When you start getting the enquiry from your marketing of the vacant tenancy, qualify the enquiry before you take people to the property.

Leasing a commercial property is not hard; it is just a specific process that should be exclusively handled by each agent.  It this way you will get better enquiry.

You can get more tips like this in our Newsletter.

Tenant Retention Strategies for Commercial Property Management and Leasing

Any commercial property landlord today will have concerns of tenancy mix and occupancy.  The landlord will not usually want a vacancy to occur in a property, or suffer a substantial loss of income from a protracted vacancy.  So what can you do with this problem?  You can establish a tenant retention plan for the property, and it can become part of the annual business plan for the asset.

Tenant retention is simply the process of retaining your good tenants and removing your underperforming tenants from a managed property investment.  When done correctly the process can enhance the income for the property and the overall investment for the long term.  This then helps the sale of the property if and when it is to occur.

How Do You Get Started?

So how can you set up a tenant retention plan and what are the rules?  Over time you can set up your specific plan for your property and landlord, but to get things going here are some tips to build the first tenant plan and start the process.

  1. Tenant retention is a specific process of a quality commercial or retail property management process.  It is necessary that you look at all your tenants in the property today and decide just who the good ones are and who are the ones that you really do not want over the long term.  What are your reasons for selecting tenants in either group?  You will need some rules to help you choose.
  2. Respecting the terms and conditions of the existing leases you can manage the poor tenants out of the property at end of their leases; the object being here to offer the space to other existing good tenants in the property, or find new tenants to fill the void.  Given that this is a critical process that will impact the income for the property, it should be a factor of consideration each year as you revisit the business plan for the asset and the landlord.
  3. Set some target market rentals that should be used with new tenants to the property and or existing tenants when they renew their occupancy.  Get a property valuer to help with the setting of the right market rental benchmarks.  Give due regard to gross and net rentals, plus required incentives to encourage a tenant to take out a new lease.
  4. Establish a standard lease for the property to control the terms and conditions for the property each time you do a new lease.  The standard lease should match the specifications of the property and the investment needs of the landlord.  A solicitor should help the landlord with this document.
  5. Monitor all existing leases that are coming up for rent review or expiry inside of the next two years.  As the dates draw nearer, the negotiations can start based on the tenant retention plan and the property decisions already made.
  6. Check with all your good tenants frequently to ensure that they are happy in occupancy and that they are not under pressure for expansion or contraction.  If they are, then you want to be working with them on that as early as possible before another landlord offers them another tenancy space elsewhere.

A tenant retention plan is a good strategy for any landlord or property manager.  It sets the scene for a controlled growth of property performance for the landlord.