When your property becomes vacant it can be a real worry for any landlord. In some locations, it can take some time to find a new and willing tenant that has the integrity and business stability to occupy your property.
That leasing and vacancy process means loss of rent, loss of outgoings recovery, incentive costs, legal documentation costs, commissions in leasing, and the list goes on. A good commercial real estate leasing agent that has a solid coverage of the local property market can be of great value to a landlord today.
So, what can you do as a landlord with your investment properties? You must stay ahead of the vacancy problem and have a good strategy in place to minimise the vacancy downtime.
Even in tough markets, vacant tenancies do lease, it’s just that it takes more time and effort on the part of the agent and or the landlord to promote and target the property to the right prospective tenants.
What is a Leasing Tenant Retention Plan?
A ‘tenant retention plan’ is a good solution for most investment properties. In a ‘retention plan’, specific strategies are created such as:
- Closer connections with existing tenants to ensure full awareness of leasing pressures and business changes.
- Creative lease transactions that are designed to match the overall mix of the property whilst avoiding mass or multiple expiry problems with several tenants or premises at the same time.
- Targeted tenant profiles of local businesses to simplify the leasing process when a vacancy is known to be happening or upcoming.
- Direct marketing of vacant space early, so that enquiry is optimized for vacancies at the right time.
- Incentive packages that are structured to encourage existing tenants to stay in a property. There are different incentives available, and a package or alternative packages can be created to suit investment targets in the property.
- A forward-looking plan or matrix assessment of all tenants in an investment property to allow lease expiry awareness and early negotiation. That matrix is typically a forward-looking assessment of occupancy looking out to 18 months from the current time.
- Leases that are matched to the investment targets of the landlord and the valuation requirements of the property financiers.
As a landlord, and if you have premises to lease, do not make your choice of leasing agent based on discounted commissions, lower fees, low marketing costs, open listing, or friendship.
None of these things will really help you lease your vacant tenancy any faster. The result is an expensive and protracted vacant tenancy that is ‘eating its head off’ financially in vacancy downtime and costs. Your losses will far exceed any gains you think you may get from savings on commissions or fees.
So, do you want a top agent to focus on your leasing requirements? Expect listing exclusivity and a commitment to paying some marketing funds to promote your vacancy. There is no better way to do things.
Ask About Strategies for Leasing
When you need an experienced real estate agent to help you lease a retail or commercial property or any property for that matter, ask them to give you their strategy on:
- Advertising to a target market that is relevant to the vacant property
- Internet listing initiatives to attract more enquiry
- Track record leasing similar local property
- Lease terms and conditions that attract tenant enquiry
- Database email circulation of your vacant property for lease
- Cold calling the business community to attract enquiry from the right business owners
- Street by street canvassing of businesses for greater information about your vacant tenancy
- Signage initiatives that show the vacancy to its true advantage
- Target marketing the property locally
- Inspection strategies designed for your property
Such a short list and some yet critical points that are so important when you are leasing property or seeking to resolve vacancies. You can do so much with these things from a leasing perspective providing your commercial real estate agent supports the process and provides the depth of experience to get the job done. Taking action on a strategic leasing plan is so important.
One final comment and going back to one key point above; ‘open’ type listings in a tough market are also a waste of time for the average landlord. The numerous agents that have your property listed as part of an ‘open listing’ are not really marketing your property intensely. It is what is called a ‘list and hope’ process when it comes to open listings. It doesn’t work.
Also Ask About Proven Experience and Market Coverage
If you want to lease your property in the shortest possible time, find an agent that has real and proven experience in the local area using the 8 points above.
Ask questions about what the agent will do for you. Get them to show you how they will attract the market to your property. Make them win your leasing business. Good real estate agents will do this and give you the confidence that you expect as a property investor.
I go back to the point that leasing a commercial or retail property is not about getting discounts from the chosen agent. It is all about market coverage and strategic approaches to the right local businesses. A timely lease agreement is more important than any ‘discount’.