When it comes to leasing commercial or retail premises, understand the opportunities of boosting the rental income over the long term for your landlord client, and negotiate the lease accordingly to provide that rental growth.

Certainly the negotiation of a lease is the main priority for the landlord, but the quality of the lease will have a lot to do with the longer term investment opportunities, property value, and rental results that you achieve.  That is where specialist leasing agents can provide exceptional specialized assistance, tenant result, and leasing outcome.  Build your listing pitch and presentation around those factors of leasing any vacancy.

It should be said that there are good commissions available to specialized property agents working the market segments in property leasing; that is certainly the case when it comes to finding the right tenants to fill a vacancy within a property.  Here are some ideas to help you work with the property owners and landlords in your local area:

  1. Identify the levels of market rental in your town or city relative to the property type.  Understand the shifts in the rental over time and the predictions that apply to growth and net absorption.
  2. Review the factors of supply and demand locally when it comes to the property type.  Any new developments are likely to shift the balance in market rental and incentive.  Oversupply and excessive levels of vacancy will soften the property market and threaten the viability of established properties.  You can monitor the factors of supply and demand through tracking the planning approvals launched for new property developments at the local building authority.
  3. A successful leasing strategy will usually be built around the improvements in the property, the quality of the tenant, vacancy minimization, and the integrity of the lease document as it focuses on the investment targets for the landlord.  When you have a lot of tenants within your database you have plenty of people to talk to when it comes to an existing or upcoming vacancy.  A good leasing agent will have a comprehensive database that attracts the upcoming lease expiries for all businesses locally, and the predictable tenancy movements.
  4. In negotiating the lease document today, you have a few variables to work with and utilize.  Far too many landlords focus on just the initial start rent as part of the negotiation when the reality of the value of the lease deal is in the cash flow over the lease term.  On that basis the starting rent can be escalated through strategic rent reviews at different times across the term of lease.  To show the landlord the real value of the lease deal you can do a cash flow analysis from the initial starting rent but then allowing for rent reviews and predictable changes in the market rental.  The starting rental is really only a small part of the leasing process.  A professional leasing agent will know how to sell the lease strategy to the landlord based on the entire lease package and cash flow results.
  5. There are different levels and types of rental to negotiate as part of a leasing strategy.  The recovery of outgoings for the premises or the property will have a relationship to the net or gross rental.  Negotiate the lease with due regard to the best possible outgoings recovery position for the landlord client across the occupancy term.  To do that successfully you will need to know the averages that apply to outgoings within the property type.  The rental information from other properties locally will help you determine the averages of rental and the outgoings strategies.

If the leasing a property is to be part of your business model then consider the extra value that you can bring to your clients as part of the lease negotiation.  Specialize within a property type and location; that will allow you to comprehensively cover the movement of tenants, the market rental, and the factors of supply and demand.  From that point onwards you can then select the landlords and the properties that you prefer to work with.