Many commercial property managers and leasing managers don’t spend enough time on tenant management and communication, only to soon find that they have an upcoming vacancy or a building that is underperforming from a rent and occupancy perspective.
There is a strong link between tenant encouragement, communication, property performance, and landlord involvement. At the base of everything sits the tenants in occupation, and their respective businesses. Without good tenants in occupation, the property suffers in so many different ways.
Set Up a Tenant Management System
Here are some ideas to help you consolidate your tenants within a commercial property, and improve the occupancy over time:
- Address vacancy issues in advance – Don’t wait for a tenant to tell you that they are leaving a property. It sounds like a no Duh!But so often we find that this is the case. Connect with them regularly so you know when they are thinking of leaving and why that may be the case. Perhaps you can offer some inducement to them to stay at lease end.
- Understand the lease dates – A property or premises lease will be full of lease dates, critical dates and response requirements. Capture all of those dates by reading through the leases and extracting the dates into some diary calendar system. Setup to alert you to those dates.
- Read all leases comprehensively – Expect all leases to be different, because they will be. Read all the leases in your managed or leased property. Understand how those documents work and why that is the case. There will be a degree of lease ‘policing’ to keep tenants and occupancy matters under control. Know the leases and what they say about tenant occupancy. So often we find that this is one of the huge problems in tenant management.
- Permitted use – Don’t let a tenant vary from the permitted use detailed in their lease. You can check that out when you undertake regular property inspections. It’s a great time to check and make sure their doing their part.
- Talk to tenants and meet with them – A regular meeting with all of your tenants will allow you to understand any pressures or issues impacting occupation or business viability. Ask direct questions and track the feedback that you get. Find things that you can go over and above to help your tenant, so that they remember that your going to take care of them whenever possible.
- Look at tenant viability – Some business segments will be under pressure due to shifts in the economy and community. Watch how those things happen in your location and your city. When a business segment is slowing, it is time to talk to your tenants about options they could choose.
- Establish a tenant retention plan – Determine who your top tenants are and how you can keep them. Set up a tenant retention plan for each one of them. A very purposeful plan will help in retention every time.
- Maintain the property – If a property is not well maintained it is likely that you will lose tenants over time. Tenants will respect your property better if you respect your property. If you keep it nice and clean and crisp, they will also be proud to be a tenant there.
- Segment tenants to short and long term – Some tenants should remain in the property for the long term given that they may give the property and its performance some value and stability. The longer tenants and the more stability that you have, the more drawn other tenants will be.
- Look at rental structures and market rents – Are you in parity (meaning are you in line) to the prevailing market conditions? Do a market rent assessment quarterly to see what is happening to lease supply, rental structures, incentives, and vacancy rates. Be careful to watch your vacancy rates and react quickly
- Track rent reviews, options, and lease termination dates – These are the factors of change in any tenant mix. Work through the dates of all tenant leases, and put the important dates into a calendar where you can act eagarly and early on issues coming up.
In establishing these things, you can prevent a high turnover of tenants in a multi tenanted commercial or retail building.