Some landlords are lazy, but there are far more real estate agents who like to make shortcuts for the quick commission. That commission almost never comes.
The New Reality:
In today’s fast-paced market, the old ways of leasing commercial space just don’t cut it anymore. When properties languish on the market for months or years, it results in missed opportunities and lost income. Welcome to the new reality of leasing commercial space.
The challenges many commercial property owners face are all-consuming: long vacancies create long-lasting problems, like maintenance expenses, vandalism, debt payments, and more headaches. It is time to throw out the old methods and embrace these modern, and innovative strategies that the savvy and ultra-rich property owners used to lease their commercial spaces quickly and effectively.
The Mindset Shift:
It’s time to rethink your strategy. This one will blow your mind. It’s not just about price anymore, even though price relates directly to value. But let’s be realistic value is what someone will pay you, and vacant space holds a much bigger discount on the price than leased space, no matter what the price. For those over extended, talk to your lender and keep them in the loop. Remember to keep your pride in the pocket as the adage goes, “he who has the gold makes the rules.”
It’s important to understand that value to the tenant differs from your value, as the owner. In order to uncover the tenant’s value, start by asking questions. Ask; what you can do to make the tenant want and even need to stay put, thrive, and happily pay your rent? Showing the tenant value in painstaking detail is important. It is not good enough to show a brief half page outline. It’s important to get yourself into the tenant’s head. If you were to open a business in your own space, what information would you want to know? It’s way more than saying the property is in a great location. That is all relative. It’s better to state what makes your property super great. Point out facts. For example, if you are talking to a breakfast restaurant, tell them the amount of people that walk by your property from 7:30am to 9:00am on their way to work. But be real. Because the tenant will fact check you. So, get your butt to your property, and sit at your space and literally count the people. If it’s a good statistic, use it. If not, well, don’t. As another example, maybe your property is across the street from a hotel, ask yourself who would benefit from being in your space. It requires work to identify your unique selling proposition, or your competitive advantage, to the next piece of property.
Identifying your unique selling proposition is crucial in today’s competitive market. Take the time to analyze your property’s features and advantages over others in the area. Is it the convenient location, the high foot traffic, or the proximity to key amenities? Highlight these aspects and present them to potential tenants.
Don’t underestimate the power of networking and building relationships. Connect with local businesses, industry professionals, and even existing tenants to spread the word about your available space. Word-of-mouth referrals can be incredibly effective in attracting interested parties.
The Daring Move, and Value Add:
Consider offering incentives to entice potential tenants. Whether it’s a rent discount, flexible lease terms, or additional amenities, be daring to make your property stand out from the competition. For example, let’s use the story of Alex, a commercial property owner of a shopping center that has an overabundance of vacancy, because of a problem with the former owner. Alex bought the property at a discount. He didn’t know about the problems, because the price bargain caused him temporary blindness. He had a large space in a deep corner of this shopping center. It was a reverse pie shape. The street-front of the space was 25% the size of the back of the store. So it had a small window on the street. But the store was in a high foot traffic area as the grocer tenant was next door. Thousands of people walked right by this store-front every day. But Alex did not know what to do as many potential tenants walked away from this space.
One day, walking through the regional indoor mall in a lower income part of town, he stopped and spoke with many tenants in that mall, asking about their interest in expanding or moving. Most tenants knew of his shopping center, and most had no interest. Undeterred by the negative, he kept going and walked into an auction company store. As he spoke with the owner, a licensed auctioneer, he asked if his business would do better in a higher income area. Alex asked him what his current rent was and offered immediately to pay for his moving costs, with a cap, of course. The auctioneer seemed interested, so Alex went further. He offered three months of free rent, if the shop owner could show Alex that his business could sustain a 5-year lease with the terms discussed. But the shop owner turned him away. Despite feeling dejected, Alex continued searching for a way to derive some value from that large vacant space.
Surprisingly, the auctioneer called two weeks later, and Alex made a new agreement, under new terms. The store owner was happy and stayed almost ten years before he sold the business and retired.
Alex had the tenant’s needs in place as well as his own, but greed or his own problems did not blind him. Alex was realistic and made the offer so that the tenant could succeed. For those of you who may not understand good landlord-tenant relationships, tenant stability is also a value add. It is much better to show a lender or even a potential buyer the time each tenant has been renting. If it is a swinging door of new tenants, then you may have the wrong landlord. For Alex, that large corner with a tenant added a huge amount of value. He later sold the shopping center, achieving favorable results.
Finally, make use of modern technology and marketing strategies. Leverage social media platforms, online listing websites, and virtual tours to showcase your property to a wider audience. Embrace technology to streamline the leasing process and make it easier for potential tenants to inquire and submit applications.
In conclusion, the key to leasing commercial space faster lies in adopting modern and innovative strategies. By understanding the needs and values of tenants, highlighting your property’s unique advantages, and leveraging technology and networking, you can outpace the competition and secure tenants quickly and effectively. It’s time to rethink your leasing strategy and embrace the new reality of the commercial real estate market.