There are lots of properties for lease in this market. Contrary to popular opinion, that’s a good thing. It gives commercial real estate agents many properties to work with and list. The only problem that arises is in finding the tenants.
The value of a tenant and a quality tenant enquiry in this property market is high. Every potential tenant should be optimised and sourced to the correct property. So what does a good tenant look like?
A lot depends on the landlord and the property, but in basic terms you are looking for a tenant that brings stability and profile to the building. Given that there is plenty of stock available for lease today, most tenants are taking time to choose the right property. On that basis every landlord really does need to have an attractive asking rent and a favourable lease term. Incentives will sometimes tip the scale and help close on a lease transaction for a landlord.
Here are some other ideas for what I think would be a quality or ideal tenant in this market.
- A tenant that has an established history of good property occupation
- A business profile that is attractive to the property and potentially can strengthen the overall tenant mix.
- The ability to pay the market rent on time and in accordance with the terms of the lease
- The acceptance of a market rent or rent review profile that will allow market rent to be optimised in the lease term.
- A reasonable bank guarantee for the landlord to retain for the term of the lease as protection against tenant default
- A make good provision that takes care of the removal of the fit out for the current tenant at the end of the lease term.
- It is questionable whether an option is a good or a bad thing; it really depends on the property and the landlord.
- The tenants business operation should function conveniently and comfortably in the property given the services and amenities
- Car parking and locational factors should work for the tenant.
- Improvements in the property are well matched to the tenant.
- Permitted use and zoning allowances for the property suit the tenant and the use of the property.
- Recoverable outgoings are achieved through lease terms and conditions with the tenant.
You can probably add to this list based on the property type and the location. The important thing is that the tenant is vetted and qualified for the property. The landlords lease terms and conditions should be built in to a well structured standard lease.
When you find a good tenant prospect make sure that every property that may suit them is identified. It is better that you get the commission than any other agent in the local area.