Tips for Keeping Commercial Tenants in a Tight Market
Posted by Peter Vekselman Saturday, 7 July 2012 07:14 No Comments
The commercial real estate market is improving but you still need to retain current tenants when lease renewals come due. Your best strategy is beginning lease renewal negotiations early. As much as 12 months early. Unless your tenants are absolutely dependant on the location of your commercial property, you can be sure they will start looking at alternative locations at about that time. You want to be part of their overall review of options instead of the landlord they come to with a “beat this offer” mentality”.
Something else to consider is investing in your infrastructure. Granted, your bottom line is probably as tight as it has ever been. However, investing in capital improvements will help your bottom line in the long term and will go a long way towards retaining current tenants that otherwise will be very difficult to replace short term.
Also, do your own homework. You need to know what is available to your tenants. Current market knowledge can be used to your strong advantage during negotiations. Instead of your tenant telling you what is available, you can show them a side-by-side comparison that convinces them that renewing your lease is their best option.
Keep your tenants happy. If they call to complain about janitorial services or any other problem, empathize with them and get the problem solved quickly. It’s much easier to replace the janitorial service than replace your tenant. Also, it never hurts resolving problems before a tenant complains. Typical problems include parking, crime, disaster management, maintenance, and mechanical failures.
Don’t wait for tenants to complain. Have an annual plan to improve something on the property. One year it might be repainting the parking stripes. The next year it might be new carpet is a shared hallway. If you don’t know what will make the property more desirable to you current tenants, all you need do is ask them.
Your tenant’s business is your business. Understand how they are performing financially and how the current market is treating them. Court existing tenants the way you would court a new potential tenant. Find ways to help them better utilize the property they are leasing.
Following these tips will make a difference in your tenants next lease decision.
All the Best,
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