To market a commercial office building for lease successfully, the critical factor is to understand and implement the preparation that may be required. That is certainly the case if there are a lot of other buildings and vacant space around your market to compete with. You may only get one shot at attracting a tenant, and that opportunity should be optimized.
Your campaign structure should take into account the factors of attraction that are likely to appeal to your targeted tenant market. If there are plenty of other properties on the market currently then your leasing strategies and decisions are really important.
If your property has weaknesses that are or could obvious to inspecting parties, then remove those obstacles. Most tenants looking for alternative space to occupy will look at a few properties as part of the process. How can your property stand out as a good leasing solution?
Here are some considerations and investigations to help you prepare for the leasing process:
- Ideal floor configuration – When you look at the floor plates for the tenancy and the building layout, you will see distances between outside walls and the core or common areas in the centre of the floor. The greater the distance between the structure of the outside wall and the building core, the easier it is to incorporate a functional tenant fit out design. The shorter the distance (say under 10m) the more difficult it is to design office space in a practical sense.
- As built drawings – These drawings will help you with tenant fit out design and connections to the services and amenities in the building. You can get these drawings for the layouts of electrical, plumbing, air-conditioning, ceiling grid, and floor loadings or structure. There may also be special drawings that incorporate the positioning and configuration of the common areas including fire stairs, communication risers, water and sewer, telephone and internet, and power grids.
- Fit out specifications – In any modern office building there is a need to control the tenant fit out works and the standards of finishes. The greater the number of tenants that you have or could have in a building, the more important the controls and the approvals. Tenant fit out works that are poorly controlled will see variations of finishes, layout, and signage that could have an impact on the presentation of the property; over time that can impact the market rent for the property and the interest of other tenants to occupy.
- Outgoings – The outgoings are those extra costs that the tenant must pay to lease the space in the building. Importantly those outgoings should be of an industry standard so that your property is competing successfully against other vacant space locally. The outgoings will have an impact on rents and leasing strategies. For this reason understand the outgoings recoveries that you do require for a standard lease and just how you can move those outgoings into a lease strategy or negotiation.
- Standard lease format – The landlord for the property should have a good lease prepared for the leasing campaign. The client’s solicitor should inspect the property to understand the factors of building function that could be incorporated into lease terms and conditions. A well prepared solicitor’s lease will likely add value or speed to the sale of the property as an investment in the future.
- Rental strategies – Not all rents are the same. The differences of net and gross rent should be reviewed for the property and the space to be leased. Make your choices of rent, investigate the market rents, and set your rental negotiation ranges before you lease the property or start the leasing campaign.
- Incentives – Lease incentives will come and go from the market based on the supply and demand factors for vacant property; the buoyancy of the business community locally will also impact leasing enquiry. If there are many other properties up for lease, then incentives to attract tenants are likely to be active to position one property more favourably over another. Talk to the landlord to determine exactly what incentives will work for them as part of any lease to be negotiated. Make the incentive decisions before lease marketing commences and tenants are found.
From these points you can see the necessity to prepare a property or any vacant space for the leasing process. That is exactly what a good leasing agent will do. The greater the leasing preparation work, the better the conversions of enquiry and inspections.