When it comes to leasing a commercial or retail property today, it pays to be frank and honest with the client about the market conditions and where their property sits currently.
In most locations there is an abundance of property for the tenants of today to choose from. On that basis every vacant tenancy should be carefully marketed with a bias towards results sooner rather than later. The longer a property stays on the market, the harder it is to move and lease. The landlord has to be helped to see the true market conditions.
The fact of the matter is that the first 4 weeks of any marketing effort are the most important. It is when the property is at its freshest and most interesting. That being said it is also the time where some landlords ask too much rent, thinking that they will ‘come down’ in rent when they get an offer. The reality of the situation is that they do not get the offers that they expect and things start to slow.
In this property market when it comes to leasing, we have to do more with less. You should condition the landlord to the true market conditions from the very start of the listing, so you can work with a listed property that is reasonably aligned to the market conditions.
So what topics should you cover in this client briefing? Here are some ideas to help you:
- Define the target market for the property so the client really knows how you see the property and what type of tenant is best suited to the property.
- Tell the client about the factors of supply and demand as they apply to local property availability today. It is also beneficial to have some graphs of trends to show them the activity and changes over the last few years.
- Define the market rental that applies to the property today. That will include the required adjustments for net and gross rent, plus any incentives in the market at the moment. Incentives will change from property type to property type, as well as location to location. Make sure that the client really understands exactly how the market sits when it comes to rental today.
- Give the client an idea of the types of lease terms and conditions that are being asked by tenants today. Set out the differences between rent reviews, options, renovation and relocation provisions, plus make good requirements on the landlord or the tenant at the end of the lease term.
When you are frank and open with the landlord clients that you work with, you can position the listing for the best enquiry possible. A quality listing is not hard to create; it just requires a strategy and confidence on the part of the agent.