When you do your ‘homework’ correctly in commercial real estate leasing, you can easily find the local tenants that are potentially moving and then build your database to connect with them in the right way at the right time. Local businesses are at the core of your leasing business; landlords may be your clients, but tenants will be the local businesses in buildings and precincts, so get to know all local contacts and business owners.
The Leasing Process
The leasing process is supported by a number of current market trends and you should watch those things very closely; you can use them in your negotiations or prospecting for new business. Here are some ideas to help:
- Market rents – The level and type of market rent applicable at any point in time should be known and assessed for each property type. It is hard to quote or pitch on a listing when you don’t have a real idea of what the market rents are.
- Investment performance factors – How will you improve the performance of the asset for your client over the lease term? The main way to do that is through the lease document and that will involve adjustments of rent reviews, options and outgoings recovery. Make the right decisions with your clients in those categories; help improve the performance of the property by setting cash flow targets in rent recovery and compare that set of targets to expectations on market rent.
- Factors of attraction – Why should someone lease a property or inquire about a particular listing? Set some significant facts and targets when it comes to your lease marketing. Weave the factors of attraction into your adverts both online and offline. Without breaking the realities of accurate property description, describe the features and improvements of the property as you see them in today’s market. Tell a story and get local tenants interested in what is available. Above all else, your lease marketing and advertising efforts must attract interest. Get away from generic advertising and promotion. Only work with exclusive listings and ensure that you spend time on the consequential marketing campaign.
- When people are moving – Through ongoing prospecting and call contact you should know when many local businesses are considering moving, expanding or contracting. That information is valuable when it comes to providing landlords with leasing services. Use your database as leverage in talking with landlords about how you can solve a vacancy issue.
- Where people are going – New property developments will usually attract successful businesses away from older and potentially redundant properties. On that basis, you should understand where people are moving to and why that is the case. Tap into the churn factors that evolve from new property developments.
- Vacancy factors in today’s market – At any given point in time, the vacancy rate for a property type in your town or city can be determined. You can then see how supply and demand is impacting property vacancy. Time on market factors will also be impacted by vacancy excesses.
- Incentives to do a lease deal – The only ways to reduce vacancy factors and or solve long-term vacancies is to escalate marketing efforts and use incentives as part of that process. What type of incentive is appropriate for the property and the landlord’s cash flow? Any incentive provided should be carefully implemented so the landlord gets back the incentive cost over time.
So this information is essential if you want to improve your leasing results locally. Do your homework in every lease listing opportunity and your results will improve.