12 Proven Strategies for Tenant Management and Optimization in Commercial Office Buildings
When you manage or lease a commercial office tower or building with multiple tenants in occupancy, there are things to look for and watch as part of keeping the tenant(s) under control. You could say that the concept is a very important part of maintaining property performance and cash flow for the landlord.
So the message here is that you can set some specific rules and put some strategies in place to keep your tenants in check and on track in the overall property performance plan for the landlords that you serve.
Tenant Management Planning and Controls
Here are some of the main rules to help you get started in your tenant control plan:
- Remember your client – Your client (the landlord) will have targets, instructions and methods of communication that they would like to see implemented. Understand those facts and stay within them.
- Local property laws and regulations – Local property laws will prevail first and foremost when it comes to the operations and occupancy of any commercial building. Ensure that your property and the tenants within and complying with those laws and regulations.
- Lease dates and documentation – Get to know all of the occupancy facts that relate to the tenant in occupation and the particular lease documentation. Extract all of the important pieces of information from the lease document including the critical dates and the obligations that apply to the tenant and the landlord. All of that information should be incorporated into a forward looking diary process that will trigger an event or a response as required in the future.
- Rent payments and arrears – Look for arrears problems and understand how you should respond when they occur. When the tenant is in arrears, it is time for you to act in a timely way. Any actions that you take regards the recovery of monies should be in accordance with local property laws and the existing lease documentation. Understand the timings of rent reviews, options, and lease expiry. Respond to those issues early.
- Lease terms and conditions – Every lease will be potentially different and unique to the occupancy situation. Understand what the lease says and how the obligations of the lease will apply to the tenant and the landlord. Any event or issue occurring within the property should be responded to in accordance with the lease.
- Risk and liability – A tenant in occupation can bring factors of risk to the property and the tenancy mix. The type of business, the type of customer, staffing factors, and business activities can all bring factors of risk to the asset. The other tenants in the asset can all be impacted when something goes wrong or happens in the property; the same can be said for customers and visitors to the property. When factors of risk and liability are active, take plenty of notes, and understand the required strategies of response. Also, recognize how any damage and or injury matters should be reported to the insurance representatives for the property.
- Alterations to Fitout and Code Compliance – Every tenant will have a unique fit out design and tenancy layout. That internal layout should be building code compliant and suitably documented for the appropriate building approvals and occupancy standards. The lease for the tenancy will normally stipulate how any alterations should occur to the fit-out. Create separate files relating to fit out design and the approval process for each separate tenancy.
- Regular inspections – On a regular basis, inspect each tenancy in the office building and talk to all the occupants. Understand or identify any issues of occupancy or risk that could need maintenance and or action. Property inspections can help you see issues before they evolve into major events.
- Permitted use – The tenant should be operating their business within the permitted use terms of the lease. Regular checks are required to ensure that such is the case.
- Maintenance – The building will require regular upkeep and maintenance. Some matters of repair will be immediate, and others can be staged to suit timing and budget constraints. Have a maintenance recording and processing system in place where tenants can easily record their repair concerns or requirements
- Photos, Notes, Correspondence – All meetings, conversations, and observations should be recorded for later reference. You never really know when you will need that special file note or photograph to support a problem or event in the property.
- Critical date’s calendar – There will be plenty of dates to watch in the property, with the tenants, and across all leases. Create a computer-based critical dates calendar to flag important upcoming issues to you. Respond in a timely way.
So there are some good things that you can do here with your tenant management systems. Stay well ahead of property lease and tenant problems. Document things and make sure that current issues are not forgotten. An action is important in any property performance plan.
You can get more tenant management tips in our eCourse ‘Snapshot’ right here.
