When the commercial real estate sales market gets a bit slow, it is the leasing market that can fill in the gaps in your commissions. That being said, you do need quality listings at all times when it comes to leasing activity and properties that attract tenants.
When an agent tells me that things are a bit slow, I usually say that it is time to look at the quality of the listing stock they are running with. Inevitably many leasing agents forget the need to focus on the best properties, the better precincts, and quality clients.
Know Your Choices in Leasing Properties
Top agents will walk away from poor quality listings and also clients that are not realistic when it comes to the current market conditions. You need to do the same. Some clients can waste a lot of your time. Everything you do is time-related. Protect your time as it is the most valuable resource that you have.
So let’s go back to the fact that leasing is a good commission ‘spinner’ when sales are a bit thin on the ground. Here are some high-intensity leasing strategies that you can use.
- Every day talk to 5 local business owners that may be tenants in occupation. Drop in your business card. Ask about leasing and premises needs. Find out what their leasing requirements may be and when the lease that they have now is to expire. Asking questions is quite an easy process; make your notes as you proceed.
- Review your market for the best listings or best properties. These good quality properties should be a feature of your prospecting model.
- Project leasing on new developments will bring you multiple commissions over time. Look for the new developments that are being considered by the planning office currently.
- Find the landlords that have portfolios currently and see if they have vacancy challenges to deal with. Become a solution for filling vacancies. Have lots of tenants in your books.
- Develop a ‘tenant retention’ plan or service that you can offer to the existing property owners and landlords as part of stabilising their tenant mix. Your fees for the work will come from the leasing arrangements that you establish. Leasing fees for a sitting tenant deal are about 60% to 75% of the normal full leasing fee. That being said it is easy to negotiate leases with sitting tenants that are soon to reach the end of their lease.
- Understand the rent alternatives as they apply to lease deals today. Those rents may be net rent, gross rent, or a hybrid of each. Incentives will also have an impact on the local property market so develop some solutions when it comes to working with lease incentives to attract property enquiry.
- The better properties produce good rents (hence fees) and more tenant enquiry. Be very selective when it comes to choosing listings and properties to work on. Get known as the agent for top properties and clients.
- As a general rule, lease documentation should be done by the landlord’s solicitor or property attorney. You are the negotiator that gets the terms of the agreement on paper. The solicitor does the rest. Don’t confuse your role; you are a negotiator and not a ‘paper pusher’. You are there to close the deals; that’s what you should be good at.
It has been said that the best commercial real estate salespeople are or have been excellent leasing specialists. It is that background in leasing that helps them to understand the bigger picture of the property and its performance. When it comes time to sell the property, that knowledge helps a lot.
You can get the leasing chart download here.