In this property market and in most locations, commercial leasing is quite active whilst commercial sales have slowed. That being said, there are still a lot of vacancies around to compete against, however a good commercial agent can make reasonable fees from property leasing. If you are located in an area with a lot of vacancies, the good thing is you have good stock to draw upon and work with. Conditioning the landlords that we act for can be a challenge, but many will listen with evidence from the market.
The principle of exclusive listings in leasing should always apply so that you can focus your efforts on the marketing campaign. A marketing campaign for leasing will be four or five month’s duration relative to the quality property available for lease. In many cases it takes at least that amount of time to find the right type of tenant. With some difficult properties will even take longer.
Points of Difference?
As leasing agents today, we need points of difference to differentiate ourselves as experts in the local leasing market. Those differences can occur in a number of ways but here are some ideas to help the process. You can add to the list as appropriate relative to your area and property specialty:
- First and foremost, you should be assisting property investors and landlords to retain any and all good quality tenants in their properties. This can be achieved through a focused ‘tenant retention plan’. Essentially the plan looks at the next two years relative to the asset and encourages the client and the tenant to negotiate new terms of occupancy based on the prevailing market conditions currently. A good tenant should not be lost to another property owner simply because the current landlord is inflexible over current levels of rental. The rental of today can be improved through strategizing the rent review process over the lease term. This argument can be proven to the landlord through a net present value analysis of the rental structure in alternative lease packages.
- It is quite possible that the landlord and or tenant will know that a particular tenancy space will be coming vacant in the near future. Those issues being the case, the leasing agent can start focusing on finding a new tenant as early as six months before the lease expiry. Obviously this requires the cooperation of the current tenant, and any inspections need to be undertaken with sensitivity to the current occupants. You can call this a ‘tenant replacement plan’.
- In your given location, there will be different alternatives that relate to lease documentation and rental type. The variations can include things such as base rental, gross rental, net rental, rent review profiles, option periods, and lease incentives. All of these things can be packaged to the plans of the property owner. In other words each lease transaction has been specially considered and structured by the agent in conjunction with the interactions with the client. Before you take any vacant property to the market to find a tenant, the same principal of lease packaging should apply. On that basis you become the leasing specialist that the landlord needs. You can call this a ‘standard lease’ strategy for the landlord client.
- Most vacant space in this market will be leased to other businesses in the same general location. Businesses like to relocate to better properties within the same location that can strengthen their customer profile and interaction. You can deliberately focus your marketing and prospecting efforts within the business community and all the tenants in major properties. Every tenant will be interested in talking about rentals, lease terms, and other quality properties nearby. The discussion that you create will allow you to compile a substantial database of future opportunity. You can call this ‘tenant profiling’, and promote the idea to the landlord.
When you move into the commercial leasing part of the industry, you can deliberately specialise and build a huge knowledge base of leasing alternatives and strategies. The only choice you then have is the types of tenants and landlords that you work for.
Make sure you get a lot of signs into the local area so that enquiry comes back to you from the vacancies that currently exist. Most leasing transactions are put together through a matching of circumstances, properties, and people. That is the high value you can bring to the clients that you act for.