When you are appointed to lease a client’s property, the tendency is to find out what rent the client wants, look at the premises for size and quality, and then market the property. The entire leasing process is much more effective when you get to know the property and the lease in great detail; and that is before you start the marketing process.
So why does a commercial real estate agent lease a property? There are many ways to answer the question however the right answer should be a combination of some or all of the following:
- To solve an outstanding vacancy issue for the landlord
- To build on the net income result for the landlord over time
- To strengthen the tenant mix for the landlord so they can improve the profile of the property for any future sale or refinance
- To achieve a balance in the tenant mix so that the other tenants also benefit from a new tenant entering a property
- To lessen the threat of vacancy and loss of rent across the property in any major way in the future.
- To achieve a commission for the agent for quality professional services offered
The only way to solve these problems is to fully understand the landlords lease and rental needs. That will mean setting some rules regards the critical issues of occupancy including:
- Rent start dates given the existing market conditions
- Rental type (gross or net) and availability
- Rent incentive availability
- Incentive type to be offered to tenants
- New tenant targets and types of tenants that best suit the property
- A tenant retention plan to help retain those good tenants in the property that you really want for the long term
- Allow for the pressures of refurbishment and relocation of tenants when and if the property needs to be improved or expanded
- The permitted use of the premises and the property with due regard to the prevailing development plan in your location
- The make good requirements of the lease at the end of the lease term
- The availability of a lease option for a further term if and when it should be offered
- The types of guarantees or bonds that should be sought from the tenant as part of the new lease to be established.
These things are very important to the lease requirement and the lease to be created. Get to know the clients standard lease before you take the property or premises to the market. If necessary ask to meet with the client’s legal advisor so you can get a copy of the standard lease and review it before the marketing starts.
If you want some more tips and ideas to help your commercial real estate agency and convert more opportunity into listings and commissions, you can get a free ebook of tips and tools at http://www.commercial-realestate-training.com
John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.