In commercial real estate the leasing of property can be quite a special issue. It can also be said that the leasing process can give you as an agent a good stream of alternative transactions when the real estate sales market is slow.
If leasing is to be part of your income and professional services as an agent, you should take the time to understand the special issues and components of a good lease negotiation from a landlord perspective.
To work in this segment of the property market with some success, you must know the strategies and the tools to use. Here are some ideas to help you:
- Understand the client's focus and property intentions. A landlord client may want to hold the property for the long or short term. They may also have intentions of property expansion, contraction, or redevelopment. When you know what the landlord wants of their property you can match the rental and the lease negotiations to it.
- Services and amenities will vary when it comes to property location and type. Tenants today can be very demanding when it comes to the standards that they require of the property. Importantly the property should be well maintained so that the tenant mix is stable and not threatened by vacancy.
- Property improvements will suit a tenant type; that then has impact on your selection of tenants in the tenant mix. Know what the property offers by way of improvements and then match those facts to the leasing strategy that you adopt.
- Regional demographics are under constant change. Businesses will be impacted by the regional activity and change. Watch out for zone changes under and in the property development plans for the area. Also look out for changes to roads and freeways that could impact property access and use.
- Tenant mix establishment is not just a process of finding a tenant and negotiating a lease. Choose the right tenants for the property and the vacancy. When you get the selection correct, you strengthen the income base for the property and lower the vacancy factor or risk for the long term.
- Rent alternatives will vary based on location of property and the local market. Understand what the market rents are doing and what tenants are looking for by way of concessions and rental alternatives. Incentives will have something to do with that. The landlord should be flexible enough to adjust rents to the market conditions.
- Outgoings or operating costs will be part of the rent structure. Net or gross rental choices will handle the operating costs for the property but you must choose the right rent structure that protects the landlord's net income for the property over the lease duration.
- Permitted use controls are applied through the lease. The selected use should be restrictive so that the tenant does not have too much flexibility in property or tenancy use. This can also be a very important issue when it comes to lease assignments during the lease term.
- Keep in touch with tenants both in the property and outside of the property. Tenant relationships will help you build a great property and income for your client. Stay ahead of tenant intentions.
- Standard lease strategies and supporting documentation should be set for the property so it is easy to negotiate rents and occupancy with a tenant and fix a vacancy issue.
So how do you get to establish a perfect leasing strategy for your landlord clients? You take steps to understand the market, the property, the landlord, and the tenants in ways that can help you create a solid match of lease terms and conditions. Top leasing agents are very familiar with the property market and know how to do just that.