Most brokers or agents get involved with leasing commercial or retail property. It is a good segment of the market to work with. It does, however, require specialisation to ensure that you have the necessary skills and market coverage to work with both tenants and landlords comprehensively.
Where do you start? Understand what the tenants and landlords are looking for today when it comes to property occupancy and opportunity. Canvass the streets and the buildings to make a list of tenant movements and known vacancies.
Effective Strategies for Leasing Commercial Property
Work your list of tenants and landlords for the long term. Keep talking to the people of your property market. Know what they are thinking and seeing. From time to time, the property market will move from ‘tenant favourable’ to ‘landlord favourable’. You can move either way. The quality of the property and the location will also have something to do with leasing enquiry and outcomes achieved. Look for the indicators and use them as you approach and work with landlords and tenants.
What can you do in providing local leasing services? There are plenty of things to learn when it comes to leasing commercial and retail property in your town or city. From the information gleaned you will know where you can best serve your clients and business owners. Here are a few important facts to remember:
- The asking rent is not the ‘whole story’. When you see a property advertised for rent, that rent is only a general indicator of what the landlord is thinking. It is not the final landlord position. Most tenants will negotiate down on the asking rent. Some landlords are more optimistic when it comes to rents at the start of things, and the realism of the property market does not feature in their original position on leasing the vacancy. Make sure you have briefed the client about current market conditions in leasing vacant space before you go to the promotion phase of the listing. Any high rent can ‘kill’ enquiry. Use comparable rents to condition the client.
- A property lease is quite variable in its final documentation. Use a qualified property solicitor or attorney to prepare and complete the lease document. That will help with accuracy and legislative requirements when it comes to property occupation.
- Investigate your tenants and their business before going too far towards lease negotiation. Some tenants are not as ‘financially stable’ as others. Get to the ‘stability’ factors of a tenant and their business before you consider them as candidates for a new lease in your client’s property.
- Landlords should be prepared to be flexible in the final lease negotiation and agreement. Market conditions dictate enquiry and lease outcomes. A vacancy can remain so for a very long time; remind the landlord of that. Some landlords that are too ‘rigid’ on rentals and lease outcomes can miss the opportunity of a good quality tenant.
- Occupancy must not be given or happen until all documents are signed by all parties, and the money under the lease is paid. Other side issues also apply with insurances, fit out approvals, and building compliances. It is unfortunate that some tenants are given early occupancy for fit-out works while the lease document is being finalized. It is then too hard to take back the premises from that tenant when negotiations slow or are derailed.
These facts are the start of leasing controls in any property negotiations. Ensure that you have all these and other lease facts activated and documented.