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Commercial and Retail Property Managers - Protect Your Tenants From Other Agents

February 22, 2012 | Comments: 0 | Views: 131

In the commercial and retail property market today we all know that there are lots of vacancies to compete with. We also know that many a proactive leasing agent is on the prowl to attract your tenants to another property. On this basis you have to be very careful with the tenants in your existing tenant mix and closely watch their rent reviews, lease options, and end of lease dates.

The clear reasons to protect your tenants from the 'poaching' problem can best be summarised as:

Unexpected vacancy in your property at a time when many vacancies exist in the local areaLoss of rent for the time that the tenancy remains vacantLoss of outgoings recovery for the time that the tenancy is emptyExtra marketing and advertising costs in the reletting of the property or tenancyLegal costs in the creation of the new leaseLandlords costs in fitout changes at the time of a new lease

So, all of this will cost the landlord significantly, when it comes to property performance today. Protect your tenants through good communication and feedback; keep the maintenance of the property up to scratch and repair any breakdowns quickly and efficiently.

To stay ahead of this problem you can track the changes to the leases and keep in close contact with all the tenants in the tenant mix. That being said, it is best to be at least 12 months ahead of any critical dates in the leases in the property or the tenant mix.

Any lease terminations today should be avoided if simple negotiation and compromise will achieve a reasonable outcome for the landlord.

The lease deal that you negotiate today is not just about the rent today, but it is really about the rental growth over time, and the stability of the tenants in the property. Every landlord should look at the big picture of each negotiation.

If the landlord is holding the property for some years, the rent review profile will pick up rent growth and improve the cash flow of the landlord, so choose your rent review methods at the time of lease negotiation with care.

If necessary, the landlord can do a NPV (net present value) analysis of the lease rent over the lease term, to see how much value they are to achieve from the lease over time.

To protect your tenants today, always look at the bigger picture and have some good market evidence of the vacancy factors and the market rents out there. A landlord will listen to facts and take in numbers; it is all strategy.

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

John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.

Source: EzineArticles
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