Commercial Agents – How to Deal With Difficult Landlord Clients

When you work in a commercial or retail real estate agency, it is easy to get frustrated with demanding landlords and difficult property situations. When the property market is under pressure, landlords are seeking greater assistance from the agents that they use (that’s us). Frustration and pressure will arise in many an agency and landlord relationship as the property market goes through change.

Comprehensive Service

In a tough property market, the commercial real estate agents that comprehensively service all property needs are those that are in demand. A well leased and managed property will eventually be sold. Every stage of the client relationship today requires special skills in the agency across leasing, sales, and property management.

Understanding the factors of change in the property market today and how to adjust for them is critical to helping clients with property pressures. The reality of the current property market is that control, strategy, results, and information are really the main factors that the landlord is looking for in moving ahead. The fact is they need our help. We are the best providers of strategic solutions when it comes to property occupancy, returns on investment, and disposal strategies.

Here are some further strategies to use with landlords in this tougher property market.

  1. Keep them up to date with property and lease issues with all tenants in the tenancy mix and the adjacent properties. Work well in advance when it comes to lease documentation and critical dates. Every lease in the subject property should be reviewed for future events and pressures on cash flow.
  2. Market information will change from time to time. Competing properties will also put some pressure on surrounding property sales and property leases. Keeping clients and landlords briefed on the pressures of the competition properties is quite important.
  3. Lease negotiations will occur with sitting tenants and new tenants from time to time. Importantly the negotiation should occur with due regard to the prevailing market conditions. That will include terms of rental, terms of lease, and incentives. The landlord can be positioned for a competitive lease transaction when all elements of the property market are clearly assessed and provided.
  4. The quality of tenants within the tenancy mix, and the threats of vacancy are two highly important issues to be managed and optimized. Both will have impact on the property income profile and tenancy mix. What threats emanate from the property tenant mix now?
  5. Stay in touch with all tenants within the tenancy mix on a regular basis. They are likely to need lease adjustments or changes of occupancy from time to time. If they are good tenants and considered worthwhile for the future of the property, then negotiations should be open and encouraged. It is better to have a stable occupancy than the volatility of increasing vacancies.
  6. Good lease management processes can be incorporated into a business plan for the property. Each year the property can be reviewed in a number of ways with the results being incorporated into the business plan. The plan would include lease reviews, tenancy mix, income profiles, expenditure budgets, and renovation strategies.

Difficult landlords are really just looking for further help and specialized assistance. It is quite likely that they and their property are under some pressures. Improve your services as a specialized commercial agent so that you can help these landlords achieve better levels of property performance in difficult times.

Commercial Agents – Advertising and Marketing Strategies for Creating Property Campaigns

When you market commercial real estate, there is a tendency to copy advertising texts and formats from other properties you have been involved with. Whilst this can be helpful to get your creative juices flowing, the reality is that the every commercial and retail property is unique.

It is best to visit the subject property and spend some time on site prior to creating the advertising content and layout. Look at and around the property so you really know what the points of attraction really are.

So here are some tips that can be adopted as you prepare for the marketing campaign to sell or lease commercial real estate.

  1. Purchase any book that will help you with copywriting and words that sell. There are plenty of these books available; they give you the words that attract readership and the eye of the reader. A few well selected words placed into your otherwise bland and generic copy will lighten it up and help convert more enquiry. Remember that the property has to be exciting and interesting, and the advert needs to convey that message.
  2. Keep copies of other property adverts from competitive agents that were what you consider good and relevant to your market. The layout and the format will give you ideas for your creative copy.
  3. Ask the client why they bought the property and what are attracted them to it. It is likely that their reasons to purchase the property will now give you a few ideas and have some leverage in designing the advertising.
  4. Get some history of the property from the client or the local business archives. Any interesting history will give you leverage in the marketing process. If the property has an identity or a name, this should also be featured in the marketing copy.
  5. Each particular property should be branded to a theme. That theme should be appropriate for the target audience. All the words and the copy within the advert should be directed at the target audience. Put yourself in the position of the reader of the advert. If you can’t do this, get someone else in the office to read the advert for you and give you valid criticism.
  6. After you have drafted your advertising and marketing, send a copy to the client or meet with them to take them through the draft material. You can have two or three sizes of advertising copy to be used in the different media channels. You should also have an editorial that complements the advertising copy.
  7. Make it easy for people to get information about the property and contact you. When they make that contact, you will need to have some form of information brochure to send them. This should also be drafted by you and approved by the client.
  8. When you draft your advertising and marketing campaigns, it is best to do so in the morning when your mind is fresh and you are under no pressure. Take time in the process so the end result copy is of high quality.
  9. You will know the deadlines that apply to lodging advertisements and editorial. Make sure that you are working well ahead of time with your advertising drafts, so the appropriate discussions and decisions can be made with the client. It is not unusual for the marketing preparation process to take a full week before the campaign commences. Get the client to sign off on all your marketing material before it goes to press.

When it comes to marketing and advertising, understand what works in the local area and generates the most enquiry. These are the things that you should be doing more frequently as part of each listing promotion. Be careful with the vendor’s money and optimize the campaign for them. Just a simple reminder here that all vendor paid marketing funds should be receipted and in the bank prior to the campaign commencing. There is nothing more frustrating than trying to collect advertising money in an unsuccessful sale or lease situation.

When it comes to the commercial and retail property market today, it is absolutely essential to optimize your chances of enquiry and inspection from each and every advertisement placed. Keep track of your marketing campaign so you know what works.

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.