Landlords in commercial real estate almost always need some help with leasing property. They don’t have the resources to attract tenants in the same way that a Commercial Property Agent can. Landlords are therefore a source of new business and commissions for any agent or broker.
In saying all of this, some landlords can be unrealistic in the leasing process; those landlords can be a total waste of time for any agent. Typically the problems are:
- Rent that is too high and beyond the local market rent
- No incentives are provided to attract tenants
- Little flexibility in lease terms and conditions
- Poor preparation of the property for lease
- Lack of marketing funds to drive a lease marketing campaign
- Poorly maintained property
- Poor tenant relationships in the existing tenant mix
Any landlord that is too inflexible and unrealistic in marketing their property their property for lease should be avoided. There are plenty of other listings and clients out there in the property market for any commercial real estate agent to work with. In an ‘ordinary’ property market, tenants can be selective when choosing any property to lease; that is what is happening in most property markets at the moment.
When working with landlords today with their vacancies, be direct and professional when it comes to your leasing presentation and proposal to help them. Talk about the current leasing market and the ways that the market should be approached. Here are some tips to help:
- Comprehensively inspect the property first before anything else is done, so you understand the strengths and weaknesses of the vacant space. It is best to resolve the weaknesses in the property or premises before any marketing campaign commences. As part of the inspection, look at the area involved, the services, amenities, floor plates, improvements, and tenant access. Look at the property from a tenant perspective; understand the factors of attraction that would help drive more property inspections and inquiry. Those factors of attraction will be the ‘headline’ points in your advertising.
- Given that you have now inspected the property you will have a reasonable idea of the target market that should apply to tenant groups, and also the level of market rent to be placed on the property. Rentals can be variable as can be the type of rental; look at the alternatives of gross and net rent in the current property market. Understand how incentives should be used in that rental structure and advise the landlord accordingly.
- It is likely that the landlord will need to prepare the premises for presentation and occupancy. Some landlord works and renovation will need to occur before marketing of the vacancy occurs.
- Determine the ideal terms and conditions of a lease to be marketed and negotiated. That will include the rent type, lease term, option periods, starting rent, and incentive. You will also need to consider the amount and recovery of outgoings in the lease structure; that decision will have impact on the selection of gross or net rent.
When you have all of these things set and under control it is time to resolve the marketing requirements and the campaign required to attract tenant enquiries. As a general rule always seek landlord marketing funds and exclusive listings to promote the vacant property or premises. If you cannot achieve those things, it is questionable whether you should take the listing.