The commercial leasing market is quite lucrative, and a good lead-in point for future sales and project activity. The overriding important issue to remember here is that ‘quality’ is a critical element when you are considering taking on the leasing of a vacancy, an asset, or a large investment property.
So, the leasing side of our business allows us to talk to plenty of business people and investors, and in all those connections will be new business. Use your vacant listings as a base for local prospecting and canvassing. Analyse the local area, the properties, and the upcoming opportunities.
Where Can You Start Your Leasing Strategy?
Before going too much further here, there is one-point worth remembering; your database of tenants will be a solid reason for landlords to use your leasing services. Build your leasing database and keep it accurate and up to date; market your real estate leasing services from your contact list and its relevance to the location and the property types.
Get to know plenty of local business people and make that awareness a solid foundation of your real estate business.
Let’s say that you have a few vacancies to work with now or some coming up. How would you work with that? Here are some of the main strategies that always help in filling vacant properties for lease:
- Inspect the asset and understand its strengths and weaknesses – the property and or the vacancy will have details and facts to review and understand. Enquire about all occupancy issues including rents, improvements, occupancy costs, and lease terms and conditions. Review the services and amenities that are available to an incoming tenant. Get details of the fit-out configuration and the quality of the tenancy and fixed improvements, floor coverings, wall treatments, lighting, and air conditioning. Are there any problems with those improvements and finishes?
- The site works – there will be landlord works and tenant works to consider as part of filling a vacancy. Who does what with the tenant works, and how much will that cost? Examine the site works, the costs, and the way in which those works will need to occur; that is as part of securing a lease or gaining a new occupant. Tenants will want to know what costs they are up for, so be prepared to answer all cost-related questions.
- Know the client’s focus and leasing requirements – the client will have targets to achieve in rent, lease conditions, occupancy costs, and tenant types. There are plenty of questions to ask as you explore the client and their lease targets.
- Tenant mix – in a building with multiple tenants in occupation, look at how other new tenants may fit into the existing mix and the location. Look for any factors of disruption to business, operational matters, and customer access.
- Set the target market of tenants – certain tenant types will be more desirable than others in filling vacancies given the rents required and the improvements in the property. Decide what the best tenant types would be for the property and then review your database for the ‘relevant contacts’.
- Look at competing properties – some local properties will be aggressively marketed, and the asking rents in each case could cross over or force some discounts on your vacancy marketing. There will also be ‘time on market’ factors to review with those other properties. How long have those other vacancies been on the market and what is stopping them from leasing?
- Review tenant requirements – understand what tenants are looking for when considering new properties to lease. How will your vacancy or property compare to the expectations of tenants in today’s leasing market?
- Assess market rents and incentives on offer – the tenants that are looking for new premises have a very good awareness of rents and incentives. They usually have an accurate opinion of property market conditions. Landlords, on the other hand, can have an inflated view of what they want for leasing their property.
- Check enquiry rates – certain property types are more ‘attractive’ and ‘marketable’ in the leasing of vacancies. Consider how attractive your tenancy could be to promote in the local area. Will your tenancy match the types of enquiry that you are getting now? What will be the promotional story that you can use for the vacancy?
- Review vacancy factors – there will be vacancies in the location that will have an impact on property lease marketing. Look at the prevailing vacancy rates and determine how you can promote your property or premises with a ‘value proposition’. There may also be other vacancies in the asset now or coming up that will impact asking rents and business profile. Look at what you will have to work with when it comes to existing or soon to be vacant areas in and around the property.
- Talk to local businesses – the local business will tell you so much about the location, who is moving, and what they think about the location or the businesses nearby. Local market intelligence like that will help you with property leasing.
- Identify ‘active business segments’ – some local businesses will be very active and, in a growth, or change phase. They should be the first businesses you approach as part of ‘vacancy marketing’.
- Canvass buildings and streets – the process of logic and a systematic approach when you are chasing tenants. Get some maps of the local area and split up your canvassing processes into streets and buildings.
So, these systems will help you with finding new good quality tenants in your location to fill vacancies in your investment properties. As you talk to plenty of local business people, track your efforts and your responses. Soon you will see a pattern of what tenants are expecting and looking for.