In commercial real estate agency you will have investment clients that are purchasing and leasing properties for various reasons. When they approach you as the agent to find a tenant, there are some issues to consider and balance as part of that process.
The basic rule to consider is that a tenant should be chosen for their benefit to the property and the tenant mix. The occupancy arrangements for that tenant should be matched to the requirements of the landlord and the property market conditions.
Here are some leasing strategies for you to think through and implement:
- You are a ‘lease facilitator and negotiator’ but you do not have to be a ‘lease creator’. It is wise to let the client’s solicitor prepare the final lease that you have created from the ‘heads of agreement’. That then allows you to focus on the best tenant and final lease that will bring the best outcome for the client. Let the client’s solicitor prepare the documentation; that being said they should react to the needs of the documentation in a timely way for you and the property owner.
- Understand the holding intentions of the landlord so you negotiate a lease that fits into those time frames. Long leases and option terms can bring problems with older properties where you need to consider renovation and relocation issues.
- The market rent for the property should be watched and tracked. In every lease there should be an ideal time to review the rent to the trends in the market. At other times the rent review can be to a fixed percentage or index change. Understand just how your lease and its terms can help the cash flow of your landlord over time.
- The incentives offered for a new lease and tenant will change frequently. It all has a lot to do with the supply and demand factors in your local property market. Watch the deals that are going through and just how they can be encouraged with incentives that are aligned to the trends of the market. Some incentives will be better than others when it comes to the client’s investment requirements.
- Negotiate a lease with due regard for property use, permitted use, the tenant mix, and the local area. Watch the competition properties and vacancies for pressures and opportunities that you can act on.
To serve tenants and landlords successfully, improve your skills and knowledge of the local area. Bring to each lease transaction the best recommendations based on sound business and leasing practices.