Commercial Agents – Rental and Leasing Strategies for Commercial or Retail Property Today

When it comes to renting and leasing commercial property today, the ultimate target should be to establish a stable and professionally prepared lease that encourages cash flow on the property over future years. Every landlord will have a different focus points and ideas relating to their investment. It is important that the lease matches the intentions of the landlord. The commercial agent needs to understand what the landlord wants to do and how the plan should work.

So when you find a tenant today, it is critical to know the lease terms and conditions that will be presented to the tenant. Hopefully you will have advised the landlord at an earlier stage so that the critical decisions here are well understood and have been set.

The different types of rental strategies to consider in commercial property include the following:

  1. The outgoings for the property should be identified and quantified. It is possible that the landlord will want to recover some of those outgoings from the tenants within the premises. This matter becomes more complex when it comes to multiple tenant occupancy in large premises such as shopping centres.
  2. The property type will have set trends and averages in the local area when it comes to lease procedures and rental levels. Ensure that you understand the factors here so that any advice that you give to the property owner will be accurate and correct as it relates to the property market at the moment. Market rentals change frequently, so speak to a number of other property agents and property valuers who can advise you of the recent benchmarks and new property deals locally.
  3. There is a significant difference between gross and net rental. The main difference is the recovery of outgoings and how it will occur. When it comes to a gross rental, the tenant is only paying one amount of money so the landlord has to gross up the rental to include the outgoings component that they would have normally recovered in a net rent situation. When it comes to net rental, the landlord will set a base rental above which the tenant will contribute towards particular outgoings relating to the tenancy and or the property. Clearly some decisions need to be made here before a tenant is located.
  4. When a lease is under negotiation, the factors of lease option come into discussion in cases where the tenant wants to remain in occupancy for an extended period of time after the first lease term. Options are useful property investment strategies although they do have limitations and frustrations from a landlord point of view. One option may be acceptable to the landlord after the initial term, but numerous options of three or four years for multiple renewals are to be discouraged. Multiple options remove the control of the property from the landlord and this can be a negative factor at the time of renovation or relocation. Options of this type also impact the property at time of sale.
  5. The rent reviews to be set for the growth of rental over the lease term should be discussed with the landlord prior to the location of the tenant. It is preferable for the landlord to set their own rules regards rent review processes rather than let the tenant dictate lower levels of rental escalation.

The rental strategies in commercial property are complex and critical to the future of the property. Take time to carefully consider the rental strategies with your client the landlord, prior to undertaking any special marketing campaign relating to leasing and tenant location.

Commercial Agents – 5 Ways to Find More Tenants Today

In this commercial property market, tenants are selective in the properties that they want to move to for a new lease. In most cases, the tenants will look at a number of premises and compare a number of rentals before they make a final decision.

This means that tenants could be talking to a number of agents at the same time. You need to be aware of the problem and adjust your inspection processes accordingly. Any information you get from a tenant may be a manipulation of the facts and not really tell you the other properties that they are looking at.

When it comes to processing tenant enquiry today, you may only have one opportunity to present the property and negotiate on the rental. Landlords should therefore provide a very attractive lease and rental package at the outset of negotiations.

The abundance of new or vacant premises creates a broad selection for the tenant to choose from. Competition therefore becomes a factor of leasing premises today and both landlords and commercial agents need to adjust the marketing processes accordingly.

To attract more enquiries to vacant premises, some of the following strategies will assist:

  1. Always put a quality signboard on the property as soon as possible. It is quite likely that the successful enquiry will come from the local area and businesses nearby. These businesses know the area and it is very simple for them to relocate if they need alternative locations from which to operate their business.
  2. Create a brochure for the vacant premises and personally take the brochure to all the surrounding businesses within 500 metre radius. Talk to the business owners regards their existing lease and property location. This process alone will give you a lot of opportunity and feedback for your database. Over time this can be turned into more successful transactions.
  3. Listing of vacant premises on the Internet is quite important. Many potential tenants will surf the net to find suitable premises to inspect. The design of the Internet adverts should feature simplicity and include a dot format. The property message needs to be simple and eye catching. You can use keywords from the search engines to optimise the exposure of the individual advert to search engine enquiry.
  4. A successful leasing agent is one that knows the local area comprehensively. As part of that process, they will know the movements of all the local businesses and the lease expiry dates. They will also know the landlords that own the most desirable property locations. Ask questions and talk to a lot of people that have a vested interest or position with commercial property.
  5. Always put your enquiry into a database and keep the contact process moving with all qualified enquiries. It may take some months to find the right premises for some of your qualified tenants; however the process really works when you dedicate the time and the consistency to prospecting.

When these rules are followed, you can tap into a lot of market activity and facts. The successful leasing agent is one that matches leasing needs to properties; it is that simple. Focus your efforts on the process and the business will come.

Commercial Agents – Marketing Commercial Property the Right Way

The marketing of commercial property can be challenging as you really do need to meet and attract a small target market segment that finds the property of relevance and attractive. The experience and marketing strategy of the real estate agent today is really very important in taking the high end commercial property to the market.

Today there is plenty of commercial property on the market for sale in most towns and cities. So it is a buyer’s market, and only a certain number of buyers can purchase a property given the difficulties in getting finance. That being said, properties will still sell if they are correctly priced and packaged in the marketing; you have to reach the right target audience.

Some property owners will find it very difficult to sell, given that their property could be quite ordinary and not be well packaged for sale. Every property has to be ready for sale; that means prepared in a number of ways:

  • Presentation inside and around the property will influence the buyers choice. Any obvious problems of presentation should be rectified.
  • When the agent takes photographs of the property, they need to be careful as to the angle and the features of the property that they capture. A lot of damage to the campaign can be done through poorly framed photographs in an advertisement.
  • If the property is being sold as an investment, it is wise to rectify any matters relating to the tenancy mix and the lease profile. If any leases have unfinished matters outstanding with any of the tenancies, they should be completed and closed.
  • If any rent reviews are still to be negotiated or are coming up soon, it is best to complete them and implement the rental change as soon as possible. The rental will have impact on the potential sale price through the process of capitalisation and return on investment.
  • If any leases are coming to the end of lease term, the pending vacancy could be a negative factor in the sale marketing campaign. Decisions need to be made regards the vacancy and how it should be handled prior to the commencement of the campaign.
  • Identify the features in the property that will attract the enquiry. That enquiry should be from the identified target market of potential buyers.
  • Check out the competition property that will be on offer at the same time that you market your property. What are the differences between the properties and how can you take advantage of the situation?
  • The first two or three weeks of the campaign are really important. During this time you will attract the enquiry providing the campaign is correctly structured. Make sure that your marketing is focused directly into this key part of the promotional activity.
  • There are lots of marketing tools to use when taking a property to and through a sale campaign. The right choices need to be made based on the right method of sale. If you make the wrong choice of method of sale, you could frustrate the levels of enquiry. A case in point is when you use an Auction method of sale and you know that most buyers cannot operate in that type of sale process.

Even in the toughest of times and in the slowest of property markets, commercial property will sell. It takes a great real estate agent with creative marketing and sale tools to attract the right levels of enquiry.