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/

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.

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?

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.