When you manage or lease commercial investment property it is critical that you stay well connected with the tenants in the property. In this way you can keep the landlord briefed on property issues and challenges of occupancy.
Given that the commercial or retail property market can be a challenge at the moment, the tenant mix and the tenant profiles in your managed properties underpin cash flow and support the landlord’s investment requirements. You must stay close to your tenants to protect the property performance situation for the landlord. Don’t let the vacancy factors rise in a property unless you have the intentions to renovate or redevelop the property, change the tenant mix, and or relocate tenants.
Here are some strategies to help you build a solid tenant communication system and tenant retention plan for your property management portfolio.
- Understand all the leases that exist in the property. That will include the critical dates, permitted uses, tenant covenants, and landlord covenants. Stay well ahead of the current property issues with all tenants and the landlord.
- Document all tenant and landlord communications and keep good records so that you have something to fall back on in times of dispute and negotiation. This becomes a real challenge when you have lots of tenants, but the fact of the matter is that things will go wrong in the property and you must be prepared for that.
- Meet with all of your tenants at least monthly so you can update them on current property issues, and more importantly see what they are doing in the premises. If you do not see your tenants for some time, things will get out of control and problems will develop. This is certainly more so the case in retail properties with smaller tenants and shopping centres.
- Any rent reviews, lease options, lease expires, and tenant covenants that require action inside the next 12 months should be actioned early. In this way you will be well ahead of the events and avoid the pressure that develops when disputes occur.
- Formally inspect the premises regularly and keep records of the inspections. Many tenants will do things inside of the premises that you cannot see from outside. Some of those things can be outside of the permitted property use under the lease.
- Any property issues that you put to the landlord about tenant mix and the leases should be in writing, and then the comments you get back from the landlord should be noted on file and confirmed back in writing.
When you do all of these things correctly, they form the core of communication to the landlord on property and tenant mix issues. The notes and actions that you have underway from these things can be reported on in writing to the landlord monthly as part of a property update.