In commercial and retail property agency today, every leasing specialist should be very familiar with the requirements of tenancy mix and leasing alternatives. Every vacant tenancy that is taken to the market should be the product of a strategy and plan. That is where we step in as the problem solvers.
As the property market changes, certain property types are producing an abundance of vacancies. That situation will change, although we currently have an abundance of vacancies to deal with and compete within some property types. This then says that every vacant tenancy should be optimized to produce better enquiry than competing properties in the same area. That is where the leasing strategist can offer real value to the landlords that they act for.
Tenant Mix Planning
Here are some tips to help you with tenancy mix planning and lease alternatives that apply to commercial and retail property.
- Tenant Numbers: Tenancy mix becomes important when you have a number of properties in a portfolio or a number of tenants within a property. Either way, the numbers become important in producing the necessary income for the landlord from the multiple leases and sources of income. That is where the leasing specialist can offer balance and relevance to the property planning process. The right tenants in a group of tenants produce tenant stability and rent optimization.
- Watch Competing Properties: Always keep abreast of the competing properties in the local area. With some property types, this comparison is critical to the establishment of market rental and tenant enquiry. Retail property is a good example and case in point. Good properties will always attract tenants. Whilst it is somewhat inconvenient for a tenant to move premises, they will do so if the right rental and incentive conditions exist. Watch the balance between supply and demand that applies to each property type in your local area. Look for the challenges of new property developments that could create instability in a market rental. Retain your good tenants at every opportunity; the downside to the landlord with any vacancy is high.
- Local Community Integration: The community surrounding a property will be important to the tenancy mix and property usage. When it comes to retail property, this requirement is even more pronounced. Survey of the local community to understand exactly what they are looking for when it comes to business services and business products. Look for the changes in the local community as to age and demographics. Look for the growth and or contraction factors that can apply through your local region. A good tenancy mix stays ahead of the market trends and changes.
- Anchor Tenants: In some properties, the existence of an anchor tenant will be significant to the stability of the income and the future of the tenancy mix. Survey your competing properties and understand the intentions of the anchor tenants in each case. Some anchor tenants will be more successful than others and will have greater relevance to the local demographic.
- Franchise Tenants: Franchise tenants are a key part of the business environment and leasing community today. Get to know the franchise tenants that are relevant to your location and property type. Those franchise tenants will have different priorities when it comes to property selection and leasing strategy. When those factors are fully understood, you will find some franchise tenants that are very suitable to be merged into the vacancy activity and tenancy requirements in your properties.
- Property Maintenance and Image: The quality of a property is a major factor in the tenancy stability and tenancy mix. For this very reason, landlords should maintain their properties to a high quality and standard. In this way, the properties will retain more existing tenants and attract local customers. It is interesting to note that many landlord self-managed properties are under-maintained due to the landlord’s bias towards improving net income. The end result can be a higher vacancy factor and unstable market rentals. In the long run, the landlord misses out.
Property leasing specialists should understand the technicalities and strategies behind tenancy mix and tenant retention. In this way, they can bring more value to landlords and property owners today.
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