In commercial and retail real estate you must condition landlords to the prevailing market conditions. In many respects they will have an inflated view of the rental opportunities that exist when it comes to finding a new tenant.
Given that there are so many vacancies around in many towns and cities, as agents we need to keep the landlords in check when it comes to market rent and leasing terms. Some vacancies will stay on the market for months if not years. The condition of the property and the supply and demand for premises in the region also has something to do with it.
So what do you need to do with landlords to ‘condition’ them to the market? Try some of these:
- Show them what is happening with the supply of premises into the market. New developments could have an impact with that. Tenants will usually move to premises that are of higher quality and competitive in rental. That then means the older and potentially redundant properties will have issues with attracting property enquiry.
- Technology capabilities, plus services and amenities are real issues to some tenants in choosing appropriate premises to occupy. A lot of businesses today require high class communications and fast internet capability in any new property location. Check out the infrastructure for the building and the local area.
- A tenant will have requirements when it comes to staff access; that could have a reflection on public transport and also car parking at the property.
- Customer access to the property and the common area presentation can have a direct reflection on the business image of the tenant. A property should look good and give customers a great experience. A property will be judged on how it appears as well as how it operates.
- The rental for a property may seem a simple issue for some landlords. They tend to forget however about the other factors of occupancy such as outgoings and other use related occupancy costs.
- Review all competing properties as to rent, outgoings, and lease terms offered. Your vacant property or tenancy should be ‘comparable’ and ‘attractive’ as a marketable vacant property.
- Improvements in a property will have a direct reflection on the target market and tenant type. Assess the improvements with due regard to functionality and relevance to the tenants that you are seeking to attract.
Given all of these things, how will you market the vacant premises to tenants? As a general rule you should ask for an exclusive listing and reasonable marketing funds from the landlord. Get the landlord to commit to the marketing of the premises in a comprehensive way.