Tips and Ideas in Commercial Property Leasing
When it comes to leasing a commercial property, you hear so many landlords say that they will ‘fix up’ the premises when they know what tenant is taking the premises and at what rent. The inference is that they will paint the walls, lay the carpet, and do the fit out work and anything else required when a tenant is found. Whilst the logic can be understood, the old saying ‘presentation is everything’ still applies and even perhaps more so in today’s property market.
As the property market continues to adjust and vacancy factors are high or variable, the landlords have not got the benefit of as many tenants to choose from when it comes to lease interest and negotiation. In many cases the landlords may only get one tenant offer to lease the premises and that may take a few months to achieve.
Everything possible has to be done to encourage the tenant to take the vacant property or premises and put in an offer. Top agents and commercial real estate specialists thrive in this market as they can talk from experience and use market evidence to support their negotiations.
The value of an agent with an up to date database of businesses and tenants in this property market is high. Landlords should only choose the agent with the best database to market their property for lease.
Today we find that the following factors apply in marketing and leasing vacant property:
- Tenants are slow to inspect a property and will eventually do so only after they have looked at a few others as well
- Offers for lease will include some request from the tenant for an incentive. The landlord should be prepared for the event of an incentive. Whilst the incentive is a cost, it is only short term and will help secure the tenant for the long term. The only fact to be concerned with is if the tenant has sufficient strength to pay the rent and operate their business from the premises successfully. Details of previous occupancy and other business locations will be valuable here.
- The tenant may compare properties against each other and force the landlords to give their best rental before final agreement to lease is achieved.
- Lease documentation will take time to get signed unless you ‘hold back the keys’ till all documentation has been correctly served and signed (this should be normal practice).
- The time on market for leasing premises is much longer today in most property situations. On this basis every leasing marketing campaign should be directed at a specific target market and the results of the campaign closely monitored.
So the secrets to leasing commercial and retail property today really focus on the landlord and their preparation for the lease rent that is likely to be created or requested. Present the property well at all times and avoid any hurdles of presentation that may frustrate the tenant from putting in an offer.