The leasing part of the commercial property industry can and usually is a very lucrative segment of activity around which you can build a career. Businesses locally are always looking to change premises and move for an array of reasons; the larger the city or town, the greater the number of businesses to focus on within that opportunity. It directly follows that you must know a lot of tenants and business owners in your location if you as the agent or broker want to build a solid foundation of leasing commissions and listings.
Know the Leasing Rules
Is this the business segment for you? Here are a few leasing rules to remember:
- Good quality buildings are much better for pulling in and converting fresh tenant enquiry.
- Some precincts will be better to focus within for tenant movement and leasing churn.
- Some business types will be more active than others when it comes to changing property or premises.
- Tenancy size should be individually considered as well as rental strategies when looking into the best target market for a vacancy.
- To improve your chances of lease negotiation success, understand the variables and balances between rents, incentives, current supply, demand, and negotiable lease conditions.
So you can and should do something with these things if you want to convert some leasing business.
Basic and Valuable Leasing Strategies
As part of working in this market segment consider what you can do with these ideas:
- Lease expiry dates and profiles – Connect with all local businesses to understand just when their leases will expire so you can move on the change momentum at the right time. Build your contacts with all businesses locally. In most towns or cities you will have several hundred if not thousands of businesses to work into.
- Fitout needs and property improvements – Most tenants will change premises if they can see an overall upgrade of occupancy standards at a reasonable cost comparison to what they have now. Understand where the better buildings are in your locations that provide the leverage in occupancy quality at reasonable and comparable market rents.
- Incentive activities – Most tenants in changing premises will want some form of lease incentive to agree to a premises change. The face rent is one thing to watch; the effective rent will be more important. The effective rent is that rent influenced by incentives in the lease transaction. What are incentives doing locally? How should you bring them into the lease negotiation?
- Market rents – Watch the changes in market rents during the year. Supply and demand will impact market rents in all types of property locally. Track those rent changes.
In looking at these 3 factors of lease activity, also assess your location for new property developments where you can get involved as the specialist leasing agent or broker. One good leasing project with many vacancies to fill can be a great source of new commissions for you.