When it comes to finding tenants for any vacant commercial, industrial or retail property, you need to have a plan to attract tenants and get the inspections underway. Far too many commercial real estate brokers simply place an advertisement in the paper and a signboard on the property hoping that the results will occur. Whilst that approach may be satisfactory for an open listing, the strategy should not apply when it comes to exclusive listings.
Under the exclusive listing process, a lot more work is required by the broker in marketing and promotion of the vacancy; the results that you get back are also far more effective. Given that every property location and market will be different, the ideal length of exclusive listing will vary, however 3 or 4 months is generally recommended. If sufficient effort (and money) has been applied to find tenants in that time and a lease has not occurred, then it is better to let the listing go back into the market on an open basis.
There are many reasons why a property will not lease. Here are a few of the main ones:
- The rent is unrealistic
- The property is too old or in poor condition
- The outgoings are very high
- The rent type is not matching the trends and requirements of the market
A vacant property will always be more effectively marketed through an exclusive process. In saying that, some agents and brokers will take on the open listing just to get ‘in the door’ with the property owner. From that point onwards it is a lot easier for them to ‘sell’ the exclusive listing process.
So where can you find tenants? Assuming you have an ‘exclusive listing’ then you can put in all the work and focus on resolving the vacancy. Here are some leasing ideas to find those tenants that you need:
- Have a local area focus in your prospecting. Most tenants for your vacancy will come from the surrounding area or town and city. Those tenants know the area and they have clients and customers that they can bring to their relocation.
- Franchise groups and tenants will be a good source of property enquiry. Look through the town or city for franchises that are successful and trading now. They may need expansion space or want to change location.
- Check out the competing properties. Some of the larger and more successful tenants will be good targets for relocation. Set up a contact plan with these tenants to help them understand the property market and the rental results today.
From time to time the vacancy factor in a location and with a property type may be high. The way you counteract that trend is to have a significant list of tenants on your database that you keep contacting over time. Eventually tenants require help in a potential relocation. So how many tenants should you have in your database for the ongoing contact process? A professional leasing agent or broker will usually work about 1000 to 1500 tenants. To do that you need a good database and a call contact program.