How to Qualify a Commercial Real Estate Tenant
In commercial real estate agency you will soon see the opportunities that evolve with working with tenants and landlords. Leases can bring you good commissions and later position you for a property sale or property management.
Either way you can find that property leasing is a good way to open the door for more new business. Qualifying a tenant will help you assemble the right tenants and the better properties. Asking the right questions will be part of that process in property matching.
So let’s say that you believe that leasing is a potential market for you to get involved with. It is then time for you to lift your skills in understanding the leasing process and working with tenants and landlords. Here is a checklist approach to finding out what a tenant wants in property type and location:
- Has the tenant been talking with other real estate agents locally or have they inspected some properties with other agents? It is best to get background on this before you take any action on inspections and introduce them to certain properties.
- If the tenant is a business entity or corporation, make sure you are talking with the decision maker from the very start. From that you should identify just how they make property choices and implement the final decision.
- What location will suit their needs? The location may be driven by customer base, raw material availability, or distribution requirements.
- What improvements do they require in the property? By property type, improvements will be unique and special. Understand the differences between office, industrial, and retail property from a leasing perspective.
- What will be the permitted use that the premises will be put to? The permitted use must match the zoning of the property and the landlord’s plans for the asset.
- How long do they wish to lease the premises for? The lease should match the landlord’s investment plans and existing tenancy mix (if any).
- What rent can they afford? As part of that process, see if they understand the prevailing market rentals and lease conditions today.
- Do they know much about the market now? Some well-directed questions should help you with this.
- What is the timing of property changeover? Some businesses have a significant lead time to changing premises.
- What car parking will be needed for staff and customers? Will you be able to get extra rental from the car parking?
- What services and amenities are needed to suit their occupancy?
Simple questions like these will help you with the right property match before you take a tenant to a property. Have a portfolio of properties ready for any inspection. Only inspect 3 properties at any one time. In this way you can help the tenant decide on key issues and locations. More than 3 properties inspected will just confuse issues.
