The commercial property market is always changing and particularly within the leasing category. As an agent or a broker, you need to watch the things that are changing and adjust your business activities accordingly. There are always tenants and landlords looking for help. Focus on the quality people in each group and you will see your enquiries convert to leasing opportunities.
The leasing part of our industry is highly geared to the local business cycles in each year that are relevant to the location. There are times in each period of 12 months when levels of enquiry from tenants are higher and significant. There are other times where enquiry slows because the business community is undergoing change or may be impacted by holiday activity. So you need to look for the patterns in both business and in property. You can then adjust your prospecting activities accordingly with both tenants and landlords.
Track these things
So there are some important things to watch for and monitor as part of providing a professional commercial real estate leasing service in your town or city. Understand the following factors and the changes are occurring in each:
- Who the tenants are – take the time to understand just who the tenants are (what they do and how successful they are) as they make their initial property enquiry. With any tenants of a corporate nature you may need to do a bit more ‘digging’ and understand why they are looking to relocate. Factors of change apply in the business sector including expansion, contraction, and relocation. Get to the real reasons for the tenants in making their leasing enquiry. Ask plenty of direct questions.
- Where the tenants are coming from – if the tenant is coming from another location, ask questions about previous property occupancy, the landlord, and the reasons for change. The other property they are leaving may have some interesting facts to study when it comes to improvements, tenant usage, property configuration, and access.
- What they are looking for – drill down into the finer points of property requirements and improvements. Location is always the first on the list; however you can always then focus on property type, size, use, access, staff and customer issues.
- The rental budgets that they are working to – the rent for a property includes a number of things and they all add up. Make sure the tenant understands the industry averages that apply by property and location type. Rent and outgoings are both impacting occupancy costs so the tenant will need to understand exactly how much things are for a quality of a property type in a certain location. Don’t spend too much time with them unless they can afford what they are looking for. A bit of ‘lease re-education’ may be required with the tenant before you show them any properties locally.
- Market rental expectations – local property rentals are driven by and equation of enquiry, supply of premises, and business sentiment. Rents will go up and down so watch the trends.
- Vacancy rates – when there is an oversupply of vacant property locally there will be a shift in incentives and market rents; the same can be said in reverse with any under-supply. Upcoming new property developments will also have an impact on the situation.
- Incentives – look into the types and size of incentives being asked of landlords as tenants seek to do a lease deal. You will need to condition your landlord clients to the prevailing market conditions relating to incentives. Rent free periods, fitout costs, and cash bonuses and just a few alternatives to consider in attracting tenants to a longer term lease in any property situation.
- Leasing standards – establish the right lease document and rental structure for the landlord’s property situation. To do that comprehensively you will need to make choices with market rents, lease term duration, option periods, and rent reviews.
- Vacant properties – any nearby properties that are vacant are likely to influence tenant enquiry and inspection activities. How can you position your property leasing activities against the competing properties?
- Tenants looking for relocation – local tenants will be moving around for many different reasons. Stay in close contact with the decision makers in each business of quality in your town or city.
- Landlords under pressure – when you look specifically at the larger properties with many tenants in occupancy, you will see trends and issues. Some landlords need help with their tenancy mix, vacancies, tenant negotiations, and relocation issues. Ask questions of the landlords and investors in your town or city.
When you understand these things and what the trends are in your commercial real estate market, you can adjust your leasing activities for better results, and a lift in inquiries from both tenants and landlords. Adjust your prospecting accordingly.