How to Take Tenant Enquiries in Commercial Real Estate Agency Today

Leasing commercial real estate is something that can provide a good buffer of commission when sales listings and actual sales have slowed.  It is also the case that a successful lease transaction can lead to a future property management or sales opportunity.  This then says that all top commercial real estate agents should be prepared to lease ‘quality’ local property.

Notice that I said the word ‘quality’ when it comes to property selection.  Determine the property size and type that will give you the appropriate fee for a successful lease transaction.  Focus locally on quality, the good landlords, and the quality tenants.  A lease transaction can take a reasonable amount of time to initiate and complete.  On that basis you should only focus on the good deals and the good opportunities.  Let some other agent have the small things to lease that have minimal fee results.

Here are some tips for taking enquiries from tenants today when it comes to leasing new premises or relocating:

  1. Make sure that you’re talking to the decision maker when it comes to the particular tenant.  Get the contact details and the identity of the tenant sorted before you provide too much property information.
  2. Ask them about the property type that they are looking for when it comes to improvements, services and amenities, location, and permitted use.  Also find out about the required lease term, the rental budget, and property usage.
  3. The tenant’s staff and the customers interacting on the property will create certain challenges when it comes to improvements and location.  Car parking is a good example and case in point.
  4. There are big differences when it comes to leasing office, industrial, and retail property.  Create checklists for each so you can ask the relevant questions with potential tenants.
  5. Is the tenant coming to you today from another property location?  Are they new to leasing property locally?  If they know nothing about the local area, you will need to fill in the gaps when it comes to business demographics, transport, communication, local area profile, and property usage.
  6. If they are coming to you from another property location, they may have some timeframe to satisfy or a property disposal requirement.  Ask the right questions to get the complete picture.  You may even find another listing requirement with the property changeover.
  7. Has the tenant looked at other listings with other local property agents?  It is quite likely that they have seen other listings and may have current negotiations underway through other agents.  It is good to know if this is the case so you can adjust your strategy accordingly.

Don’t be too eager to take a tenant to a property.  Get all of the facts together prior to the inspection process so that you don’t waste your time with the incorrect strategies or listings.  Match the tenant to the property before you leave the office; qualify them.  If necessary take them to a number of properties to give them a comparison of current market conditions.

Get more tips like this in our Newsletter.

Retail Shop Leasing Success for Property Leasing Agents Today

The retail shop leasing process is quite specific and special.  It requires property agents that are very familiar with the retail industry and shopping center dynamics.

It is no secret that the retail shop industry is changing due to the impact of the Internet and the current economic circumstances globally.  That being said, the retail shop industry doesn’t disappear it just changes.  We are best placed has specialized leasing agents to help tenants and landlords move through the process of change when it comes to shopping centers and specialist retail properties.

Here are some tips to help you with creating your retail tenant mix and plans for shopping center leasing optimization:

  1. Check out all of the other competing properties in the local area.  They will have factors associated with vacancy, tenant movement, and tenant success.  Make a list of their tenants for direct contact and cold calling.  Some of those tenants will be more successful than others.  It is those tenants that you should encourage to move to your property.
  2. Look at the other competing properties with regards to property improvements, customer access, and customer profile.  Also look at the factors of car parking, public transport, and property size.  Are there any weaknesses in these factors that can be optimized in your property?
  3. The franchise groups in the local area will always be a good opportunity for tenant enquiry and new leases.  It is simply a matter of understanding the properties that they are looking for.  It is likely that they will have specific lease terms and conditions that apply to any premises that they negotiate on.  You will need to brief your landlord on the standard terms and conditions that the franchisor requires.  The franchise agreement needs to integrate with the lease of the premises.  Your landlord needs to understand that fact so that the business can operate within the branding and business agreement requirements of the franchise group.
  4. With any larger retail property, it pays to stay ahead of any lease issues.  They include rent reviews, options, and lease expires.  Look at all of these events at least 12 months in advance.  This then allows you to plan the interaction with the tenant given the conditions of the local property market.
  5. If you want to be a retail leasing expert, grow your knowledge with regard to business viability and different business types.  Some businesses have different requirements as to cash flow and occupancy costs.  If those requirements are exceeded, it is likely that you will have an unsuccessful and volatile tenant.  Ultimately that will mean a new vacancy.
  6. With your existing tenancy mix, consider the factors of expansion and contraction as they apply to each particular tenant.  Help the existing good tenants within the property to adjust the leasing needs and remain in occupancy.
  7. The anchor tenants in a retail property are very important to the overall success of sales, specialty tenants, customer visits, and market rental.  Stay close to the anchor tenants as part of an ongoing lease strategy.
  8. Retail leasing and shopping center performance are quite unique strategies to be developed for each landlord and property location.  It is not unusual to have a business plan developed for each medium to large property.  In that plan you will have income profiles, expenditure management, maintenance plans, tenancy strategies, tenant retention solutions, and reporting requirements.

Retail shop leasing is perhaps one of the most interesting and rewarding segments of the property market today.  That being said, it does require people that understand retail business and property viability.

Commercial Real Estate Agents – Leasing Tools that You Need Today

In commercial or retail property leasing, it is important that you are prepared for the property inspections that you take with prospects.  You only have a short time to create the interest of the tenant prospect and move them to a lease offer.

Here are some tips from our Newsletter.

So what is the focus of the leasing inspection? It should be to create the interest of the tenant and remove any questions that they may have regards the property.  To do this you have to be prepared.

Here are some leasing tools that you can use as part of the leasing inspection of vacant premises:

  1. Be aware of the competing properties in the local area.  The prospective tenant is bound to have seen those properties with other agents or at least be aware of the space availability and the asking rent.  You will have to know the differences in properties and why one rent is more relevant than another.
  2. The asking rents for your property should be in parity to the market rents locally for properties of similar type.  Have you checked that out?  Is your asking rent within the reality of the current market rents?  How will you pitch the rent requirement to the tenant when they challenge you?  How can you sell that rent package?  You will need to have your answers ready.
  3. Take some measurement tools to the property.  That will usually be a laser measurement tool to calculate distances, plus a measurement ‘wheel’ that you can use to walk around the property.  It is important that you do not certify areas and distances as you are not a surveyor, however you can give approximations to the tenant so they know approximately what factors exist in the property.
  4. Always have a camera with you to take photos of relevant parts of the property.  It is remarkable where those photos will come in handy in later conversation with tenants.
  5. Take a list of services and amenities in the property, together with fixed improvements that may be relevant and important to tenants in occupation.  Some tenants are very interested in communications and power capability in the premises.  Ensure that you have the information at your fingertips.
  6. When it comes to inspecting office premises, the tenants like to know about the finishes that are required in any fitout changes.  If your property is a modern property with quality finishes, there will be some guidelines to apply here when it comes to negotiating tenant fitout design and standards.  Get details of these things from the property manager or landlord.
  7. The plans for the property will show as built factors relating to structure, electrical, air conditioning, hydraulic, and lighting.  The plans will also show you where the riser is in the building for the tenant to tap into the property services.
  8. Take notes of all representations made and comments given in a leasing inspection.  Those comments could become critical in the ongoing lease negotiations.
  9. Lastly you should have a reasonable knowledge of the outgoings to be paid by the tenant in the property.  Those outgoings will be impacted by the type of lease to be used.  Those outgoings should be in parity with other properties of similar size and type in the local area.

When you are fully prepared, the leasing process and inspection becomes much easier.  Top leasing agents are always prepared to give the right information in the property leasing inspection.

You can get more tips like this in our Newsletter.

Shopping Centre Managers – How to Get the Retail Tenant Mix Right

When it comes to leasing and managing a retail property today, the tenant mix is critical to the income that you create.  Without a successful tenant mix, the investment performance for the property owner will be difficult to achieve.

In a retail property today, there are just so many things to be carefully balanced; that is because of the prevailing economic conditions and the property market pressures locally.  At this current time and in most locations, it can be difficult to find the right tenants to fill vacancies.  It is also hard to keep the tenants in the property.

For this very reason, a tenant retention plan and a vacancy leasing strategy should be adopted by all agents in serving their clients.  These elements should form part of the business plan for every investment property under management.  Top clients need a top property management and leasing service, and that is what this process can do.

All of this being said, as professional commercial and retail property leasing experts and property managers, it is up to us to bring the required experience and knowledge to the landlords that we serve.  Special skills are required when it comes to tenancy analysis, and tenancy mix strategy.  These special skills also command a fair and reasonable fee for service.  Discounts do not apply for a top service in our industry!

The placement of a tenant is simply not a matter of just leasing, negotiating, and occupancy creation.  It is a matter of finding the right tenant for the right property, and matching the lease back to the requirements of the landlord’s investment strategies.  The age of the property will also have some influence on the leasing process given the requirements of refurbishment and tenancy relocation.

Here are some factors to merge into your property leasing strategy and tenancy mix.

  1. Get to know all of the tenants in the particular subject property.  A close working relationship with them will help you identify any pressures of occupancy or rental payment.  With the property market today, as difficult as it currently is, it is better to retain tenants in occupancy through good lease management procedures, than to lose them to another property where incentives or rental adjustments may be more attractive and the landlord is more flexible.  Understand that many other real estate agents will be chasing your tenants as a natural course of business.  Your property package needs to be competitive in the local property market.
  2. The factors of supply and demand will apply to your property type and the local area.  Those factors will also influence market rentals, incentives, and vacancy factors.  Every landlord needs to be updated regards the trends of the local property market so that sensible leasing decisions can be achieved.  An extended vacancy and loss of rent is far more damaging to a property than a startup lease with a lower rental.
  3. Check out all of the major properties locally that could be considered as competitors to your subject property.  Review their tenancy mix and vacancy factors.  Look for the strengths and weaknesses that apply to each particular property.  If possible, get details of the current market rentals and the upcoming vacancies in each property.  With this information, you can influence some of those tenants towards your landlord’s property.

A very skillful commercial or retail leasing expert knows how to balance all of these things for the clients that they serve.  Create a tenant retention plan and a tenant communication strategy to strengthen the overall lease profile of the property for the landlord.  That is what leasing and property management is all about.  In one word you could say it is the creation of ‘stability’.

If you want more tips on tenant mix and tenant retention, you can get them at our main website http://commercial-realestate-training.com/

Retail Leasing Tips and Ideas for Shopping Centre Leasing Agents

Retail leasing is a special part of the property industry.  With the right knowledge and skills it can offer you as an agent, real opportunity in listings and commissions.  Even in the tougher times when retail trade is under some pressure, good commissions are still to be had by retail leasing specialists.

The fact of the matter is that retail leasing is so specialised that only some agents have the knowledge or the focus to do it well.  Shopping centres do not disappear when retail shopping is under pressure; they just change the tenant mix and market their tenant offering more specifically and aggressively.

So what can you do to lift your focus and become a good retail leasing expert?  Here are some ideas to get you started:

  1. Research all of the shopping centres in your region.  Assess each property with due regard for age, customer type, tenant mix, market rental, and vacancy factors.  You will soon see some standards and trends that apply to a successful retail property.
  2. Local business owners will be a very good source of opportunity and leads.  Talk to all the retail tenants in other properties to see what they are doing by way of opportunity and how they view the current retail trading conditions.  Some of those business owners will be looking to relocate or expand premises.
  3. Review the standards that apply to the tenant mix in all the local shopping centres.  You will soon see the successful tenants in the mix standing out for unique offering and marketing.  It is those tenants that will thrive in most economic cycles.   Talk to those tenants about current retail trade and what they may be looking for by way of a new business location.
  4. Get to know the principles of ‘clustering’ as they apply to retail shopping centre tenant mix and strategy.  Well designed retail tenant ‘clusters’ are a part of a tenant retention plan and tenant mix strategy in any shopping centre.
  5. Rent types will change from property type to property type and location to location.  Get to know the trends of market rentals that apply to retail properties through your region and compare those rents across different properties.  As part of that process, include factors of outgoing and tenant operating costs in retail shopping centres.  You will soon see how tenants must trade to be successful.
  6. Marketing trends in a shopping centre are both at a tenant level and also at a shopping centre level.  The retail message has to be consistently spread around the shopping community and region.  Look at the marketing efforts that apply to retail tenants and shopping centres.  Good marketing will help the profile and trade of any shopping centre.
  7. Incentives will shift and change for new tenants in retail premises.  Any new development project will offer new and high incentives to attract tenants to their premises.  Monitor the retail developments coming up in your region.
  8. Retail shopping centre owners and shopping centre managers will need the assistance of a retail leasing expert from time to time.  It is important to know that these people know what a retail property is all about and they will expect the same from the leasing people that help them with any upcoming vacancies.  Make sure you know your facts, market, and tenant mix before you talk to these people.
  9. Franchise groups will move around the retail properties and region.  Get to know the retail franchise groups for the lease needs they may have.  As part of that process you will need to know their standard terms of occupancy and property requirements.

Retail leasing is a very special part of the property industry.  For those of us that want to specialise in retail, the rewards are many.

Automate Your Tenant Retention Plan – Tips for Commercial Real Estate Leasing Agents

In commercial and retail property today, a tenant retention plan should be part of the services provided by specialist commercial leasing agents and property managers.  The retention plan can be a value-add service for the clients that we work for.

It is no secret that the commercial and retail property investment market is under some strain.  That is all due to the pressures on the local business community.  This will change and improve over time.  Up until then, we need to approach the property market with system and focus to help the clients that we work for.  The tenant retention plan is one way of doing that.

That’s presume you have a good property to work with and the client to assist when it comes to tenant retention.  Here are some tips to help you build the program and the system of retention.

  1. Review the property comprehensively to determine which tenants are more important to the future of the property.  Those high priority tenants should receive special treatment when it comes to lease renegotiation and occupancy.  The other tenants in the property may be retained although some form of priority needs to be determined.
  2. Review all the leases relative to all tenancies.  Those leases will contain critical dates and terms and conditions that will have impact on the property function and tenancy mix.  Ensure that those dates and factors are allowed for when it comes to tenant negotiation and tenant planning.
  3. Keep in close contact with all tenants within the building to ensure that any needs of expansion or contraction are fully understood.  If you do not do this, it is quite likely that the tenant will look elsewhere to other agencies for assistance and relocation.  Before long you will have a vacancy to deal with which could have been avoided?
  4. To formulate a good retention plan, you need a strategy of rental and lease documentation.  The rents for the property can be either gross or net and should be determined based on the trends of the local property industry and the age of the property.  The rents should assist the landlord to recover property operational costs (also known as outgoings).  Any rent reviews applied to the leases will be based on the rental type and lease term.  Strategy is everything with rental choices, so make sure you have the right information to help you with the correct rental choices.
  5. Lease incentives will vary throughout the year from property to property and with relevance to any new property developments coming up.  Incentives will potentially attract your tenants to move elsewhere.  For this very reason, your client, the property owner, needs to be quite flexible when it comes to the setting of lease incentives for existing sitting tenants.  Failure to provide an incentive to a sitting tenant may very well see them move elsewhere.  The cost of a vacancy in a property is significant and most inconvenient at most times.
  6. As part of the retention plan, review the local area with due regard for competing properties.  They will have an impact on your tenancy mix and also market rental.  Some of those competing properties will be influencing your tenants to move elsewhere.  Be careful and respectful of these competing properties.

So these are some tips and ideas that can apply to the tenant retention program.  As a specialized leasing agent, you can establish some real strategy here to help the landlord with their property momentum and property focus.  When the property market is slow or tough, the value of a retention program is high.  You simply need to structure your fee for service into the appropriate appointment to act.

Commercial Real Estate Agents – How to Prospect for Tenants

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.

  1. Are they a tenant in occupancy or do they own the property?
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Tenant Retention Plans – A Checklist for Commercial Real Estate Agents

In today’s property market, your current tenants in your tenancy mix are important to the future of the property.  When you create a tenant retention plan, you can optimise the income potential for the property.  That being said, a tenant retention program should be part of a professional property management and leasing service provided to landlords by agents.  Good commercial property agencies provide this specialised service.

It should be said that tenant retention is not just about lifting the rent for the landlord; in fact, that is probably the wrong strategy to adopt in your plan.  It is better to have a few priorities in balance so your retention plan forms a key part of the business plan for the property.

In particular, a good retention plan should include the following as goals:

  • Stabilise and minimise the vacancy factor
  • Create a group of prospective tenants for the vacancies in the property if and when they arise
  • Support the tenant mix so that tenants can occupy in comfort and build their businesses
  • Control occupancy costs for the landlord and the tenants within realistic benchmarks
  • Underpin the market rental for the property which in turn can support sustained property values for the landlord
  • Allow for tenant movements and property refurbishment strategies in parts of the property as planned at the beginning of the business or financial year
  • Help keep tenants in occupancy for the long term and in balance with the landlords investment requirements

Retail Importance

It should be said that a retention plan is highly important in retail property given that the stability of the tenant mix is required to keep customers coming to the property on a regular basis.  Any vacancy in a property is quickly seen and will detract from the image that a successful retail property needs to set.

So how can you establish a plan of this type?  Here are a few ideas to help you get started:

  1. Understand the supply and demand for tenancy space in the local area today.    As part of that process get to know what new property developments are coming up that will impact the available space ratio.
  2. Consider your property as it is today and determine what refurbishment and relocation issues should be merged into your retention plan.
  3. Split your tenancies into high value tenants and low value tenants when it comes to the future of the property.  Some of your tenants you cannot do without and everything must be done to encourage them to stay in a property.
  4. Anchor tenants will normally be secured on long leases.  The instability or change of an anchor tenant can impact all speciality tenants in a major way.  Find out when the anchor tenant lease expires and just what the anchor tenant thinks about the property today.  Do they intend to stay in the property?  When does their lease expire?  Can they do more to work in with the other tenants in the specialty areas?
  5. What levels of trade exist in the retail property and what tenant types are more successful than others?  This information will help you find new tenants that suit the customer needs in the property shopping centre or retail property.
  6. Is your property servicing a particular need?  In retail property this could mean ‘convenience’ or ‘destination’ shopping.  When you know what works in a property, you can do something more with it.
  7. Common area use will have impact on special property precincts such as ‘food courts’ and just how customers move through the property.  Take a survey of those factors and form and opinion as to how successful they are now.  Changes may be required to help in tenant sales and retention.
  8. Look at all the leases in the property and identify any leases that have market rent reviews, options, or expiry dates in the next 2 years.  Those tenants or leases will be a major focus of your retention plan.

You can add to this list based on your property and the overall location.  Importantly you should create a tenant retention plan that can help improve the performance of any property in any market.  That is why you were engaged by the client in the first place; correct?

Fact Finding the Ideal Tenant in Commercial or Retail Property

When you have a vacancy or a pending vacancy in a commercial or retail property, you need to target the right tenant to fill that vacancy.  This then suggests that not all tenants will be suitable for a given property, and that observation is correct and real.

Commercial property agents should know exactly what the right tenant would be for a given vacant area in any property; and then they should know how to find that targeted tenant.  Top agents do this all the time.  These top agents are in touch with the movements in the local area and business community.

  • How much do you know about the local business community and its leasing pressures and leasing future?
  • Do you know what tenants are looking for today when it comes to new property movements and where they are moving to?
  • Are you in touch with lots of tenants as part of the prospecting model that you use?

So what does an ‘ideal tenant’ look like in your property location?  To a degree the question is answered with the following factors in mind:

  • The needs of the local business community
  • The prevailing tenant mix
  • Business sentiment and volatility
  • Supply and demand for new and older lettable space
  • The growth of the surrounding population
  • The business base and profile of the local area

In any investment property location and area, there will be ‘seasons’ and ‘peaks’ of property enquiry in any given year.  In most ‘years’ the leasing market is active for just 10 months, allowing for seasonal holidays, climatic conditions, and property availability.  For this very reason it pays to work well in advance with known property vacancies and leasing requirements.

An ‘ideal tenant’ will vary from property to property but many of the following factors could be on the list of ‘tenant requirements’ from a landlord perspective.

  1. A stable business that brings brand and identity to the property
  2. A tenant that integrates into the property existing tenant mix well
  3. Lease terms and conditions that strengthen the property rental income over the lease term
  4. A solid and secure market rental that underpins the value of the property for the landlord
  5. Tenancy design and layout that gives a good image to the property

Does such a tenant exist?  Yes is the basic answer, and to find them you should make contact with all of the businesses in the local area on a regular basis.  Over time you will find the good tenants, and those that want to move to other quality properties.  Most businesses stay within the same general location when they relocate, so they can take their customer base from property to property.

Commercial Agents – How to Find Commercial Real Estate Tenants to Lease Premises

Today it is somewhat of a challenge to find the tenants that you need to fill the vacant premises in all of your listings.  Rest assured that the tenants are out there, and it is just a matter of developing a contact system to find them.

An in balance in supply and demand for new and existing lettable space means that most cities and towns can be experiencing an abundance of vacant space.  If that sounds like your property market, then read on.

The Best Way?

One of the best ways to find new tenants to lease premises is by maintaining a contact system in your database where you keep going back to the businesses in your local area every 90 days to see if occupancy matters have changed for them.

  • Do they need to relocate?
  • Do they want more space locally?
  • Do they want to sublet?
  • Would they want to assign their lease?

All of these are interesting questions that require specialist assistance and that is where the local agent can be of great value.  The local leasing agent understands the property market in many different ways including rents, lease terms, incentives, and lease types (just to name a few).

The fact of the matter is that most business owners just want to get on with making money.  They have little or no idea of leasing trends of the local property market until they require new premises to relocate to.

Most leases go for a period of 3 or 5 years, however the 3 and 5 year term is really common.  This then says that any tenant that has been in a lease for a period of time could be coming up to a lease expiry or renewal.  Approaching tenants and asking the right questions is all that is required to become successful as a leasing agent in this and any other property market.

Build the property market around you so that you know what is needed by the tenants today and have all of the property information at your fingertips.

What does a ‘top agent’ look like?  They look ‘busy’.  Build your system of contact with your local businesses and the leasing market opportunities will open up for you.