The Ultimate Guide To Securing Leases For Your Commercial Property
A commercial space without tenants is like a leaking tap. It’s money down the drain in terms of taxes, advertisements for the property, as well as maintenance and renovation costs. You’ll find yourself spending more money trying to keep the building attractive while less money is coming in due to vacancies. With so many commercial spaces sprouting in both city centers and suburbs, commercial property leasing can be a difficult task. In this article, our commercial property management experts give you the ultimate guide for attracting the best tenants who will keep your commercial space bustling yet in good condition.
Important Considerations Before Beginning The Search
Before we delve into the nuts and bolts of securing leases, you’ll need to analyze and research a few factors that affect your marketing approaches in a bid to attract tenants.
When it comes to commercial real estate, location is everything, and business owners want to open shop in a location that complements their business’ target markets. Take time to analyze the location of your property. Is it busy, quiet, affluent, or secure? Research demographics that will help you market your space effectively to the right business owners.
- Types Of Businesses
A doctor may not establish an inpatient clinic in your building if the area is surrounded by noisy night clubs. However, a fast food joint could thrive in this environment. By analyzing the types of businesses dominating the area where your commercial property resides, you’ll be able to zone the available space appropriately, market effectively, and attract the right kind of lease faster.
Commercial spaces tend to go for higher rates than residential properties, but this doesn’t mean that businesses necessarily have the funds to pay an expensive lease. Keep in mind that, like you, every business owner wants to maximize their profit margins. Your pricing can either attract or repel potential leases. To get these numbers right, research the rates of surrounding buildings to establish what they’re charging. In addition, calculate additional expenditures such as taxes, cost of security, and maintenance fees to find a way to incorporate these into the lease. You may also research different types of leases, and how you can utilize each to maximize your profits without over-burdening the tenants.
How To Attract Tenants for your Commercial Property
No. 1: Research And Understand Your Target Demographic
When trying to secure leases for your commercial property, it will be important to ask yourself the following questions about your ideal tenant and potential audience. Who are you advertising to? Where do they get their information from? How accessible are they? What is their age group, how much do they make, and what kind of features are they looking for in a commercial space? These questions are crucial because they’ll help you sharpen your marketing campaign, and with the right research and data, you’ll be able to understand what channels to use in advertising the space and the kind of messages your potential tenants need to hear in order to respond positively to your listing.
No. 2: Prepare Your Property Adequately
A good first impression is your most crucial asset. When potential tenants walk into your commercial building or space, they need to feel a sense of belonging. Help them envision themselves running successful businesses in your premises. It’s all about simple things like maintaining a clean interior and exterior environment, as well as painting the walls to create a productive environment. In addition, ensure the lighting works perfectly and that there is plenty of fresh air inside the building. Seemingly irrelevant things like a dirty toilet or dusty window panes can be off-putting to walk-ins. Remember, the commercial space is your business and you have to package it appropriately.
No. 3: Use Incentives
Everyone loves a good incentive. With such stiff competition in commercial real estate, offering perks, however seemingly small, will help you secure potential leases faster. If potential tenants feel rewarded before even renting your space, they’ll feel compelled to not only consider your building but stay long-term. Common incentives used by commercial real estate landlords include:
- Free WiFi
- Free snacks and coffee
- Discounts on rent for the first few months
- Free cleaning services for the first year or forever
In a nutshell, any incentive that helps a tenant whether a freebie or a discount will put you ahead of your competition. While thinking of incentives for your tenants, consider working with service providers within the location. Cafes, garages, furniture stores, and cleaning companies will be more than willing to give you discounted prices if you allow them to serve all of the tenants in your building. In all, you won’t have to dig deep into your pockets to finance these incentives.
No. 4: Create A Referral System
Existing tenants make excellent sources for lease leads. After all, business people will gravitate toward business people in their social circles. The tenants in your building are well-positioned to connect you with other people looking for offices or business spaces. However, they have their own personal businesses to run and they may not pay much attention to helping you fill up your building unless you’re rewarding them. A referral system with rewards has proven to be very effective in commercial real estate. For instance, you could give rent discounts to existing tenants if they bring a new tenant onboard. Better yet, each referral could be worth a few points which can get converted into coupons, rent discounts, free parking, or vouchers for a furniture store. Simply look into the things that matter to your tenants to get creative with your incentives.
No. 5: Advertising + Marketing
If you want to attract valuable, long-term tenants within a reasonable time frame, you have to invest in advertising and marketing. Marketing exposes your commercial property to as many people as possible. Keep in mind that there are both good and bad tenants. Good tenants pay their rent on time and they have the decency to leave your property in good shape once their lease expires. They’re also respectful to other tenants and they’ll be keen on taking care of shared utilities. As a property owner, you want to attract the best tenants in your building. However, if your pool of potential tenants is limited, you might have to settle for whoever shows interest in the space, regardless of their tenancy attributes. Marketing and advertising will help you attract a bigger pool of prospects, thus giving you the opportunity to secure the best possible lease.
Below are a few marketing tools to consider:
If you have a sizable marketing budget, you may consider advertising your commercial property on various traditional media platforms such as billboards, city benches, and buses, radio, T.V., or local and regional news sources. These kind of platforms are excellent if you’re trying to reach out to a predominantly conservative demographic. Your target audience, in this case, could be older (40+ years old) business people who read newspapers or listen to the radio and watch T.V.–rather than podcasts and YouTube videos. It is also important to note that advertising on traditional media is likely to attract higher paying clients. People tend to associate properties advertised on these platforms with seriousness and affluence. Television advertisements, for instance, are not inexpensive. They will, therefore, attract deep-pocketed businesses due to the fact that they are far-reaching and impressive.
Search Engine Marketing
Research shows that 90% of property buyers and tenants start their research online these days. The internet has become a marketplace, and this is where you need to be if you are trying to secure leases in the Digital Age. If you do not have a professional website for your property, it’s time to start building one. A website will make you accessible and visible to prospects 24/7. Site visitors can contact you and view images of your commercial space listing(s) any time. Moreover, you can use your website to create a referral system using online forms that appeal to more than just your tenants. The bottom-line in search engine marketing is that it opens up opportunities for exposure even when you’re not actively marketing. It’s a long-term investment and ongoing tool you can develop for your commercial property.
According to recent statistics, nearly 3 billion people are using various social media platforms. Social media is clearly packed with opportunities as your next tenant could be scrolling through Facebook looking for property leads. Various social media platforms have incorporated business-friendly features that enable clever advertising. Subsequently, many real estate professionals are turning to social media as an advertising tool. Creating social media pages will give you an opportunity to run low-cost campaigns (social media advertising is relatively flexible and affordable). In addition, interested tenants can always check your active pages any time of the day for images of your property and reviews from other tenants. All you need to get started are quality, high-res images of your property and creative content to convince audiences that you have the best offers.
Brochures And Pamphlets (Print Campaigns)
Traditional print campaigns, besides newspaper, are also an affordable way to advertise your property. Brochures, for instance, do not require much input or finances, and you can add as much information as possible. From property features to prices and descriptions of the surrounding location, a brochure can supply all the crucial details that a potential tenant needs before applying for a lease. Also, keep in mind that brochures are small and can be handed to people in the streets. You may also dispatch your printed campaigns to different buildings for interested parties to pick and read. It’s that simple and easy.
Digital property listings attract more numbers than your website can afford, as this is where everyone goes when they’re searching for properties. In order to leverage their power, post your property on as many listing sites as possible. While you’re at it, invest in professional photography to ensure your listing stands out in a pool of other enticing properties.
No. 6: Work With Brokers + Property Agents
Leasing a property requires more than running campaigns. Interested tenants will want a tour of the building. They will also want to ask questions concerning utilities, security, as well as lease policies. You may not have enough time to guide all of the interested tenants through this process yourself. Luckily, there are many commercial property management agencies. From individual brokers to established agencies, you can delegate any number of duties pertaining to tenant acquisition, property tours, advertising, and legal paperwork to these kinds of businesses and then focus on property maintenance. Brokers and agents are well connected since they represent both tenants and landlords. They’re well aware of what it takes to attract tenants and secure leases.
However, if you choose to work with brokers, you’ll have to pay them a commission for each tenant they onboard. It’s a matter of deciding whether you want to save time or money. An important factor to consider is the location of your property. If your property is in a more secluded location, you might need to work with brokers. However, if your location attracts a lot of foot traffic, tenants will probably sight your ‘vacancy’, ‘for lease’ announcements, or any other outdoor signage as they pass by.
No. 7: Invest In Virtual Reality Tours
The modern entrepreneur does not always have time to run a business and do site visits at the same time. This is why you ought to consider showing prospective tenants every aspect of your property using digital tools. A virtual tour gives potential clients an elaborate look at your property but in a virtual space through camera lenses. Simply put, a camera captures every angle of the property, then the raw footage is edited to create a continuously moving video that simulates how a tenant would move throughout your property. You can work with a professional videographer as well as use special software to edit your footage.
Once your virtual tour is ready, post it on several digital platforms such as your social media pages, your website, and/or property listings. Compared to still images, virtual tours give tenants a clearer idea of what your property actually looks like. Therefore, if they decide to visit the site physically, they’ll have made the decision to purchase it or they’ll be viewing to confirm what they’ve already seen. This makes your work easier as you’ll only be dealing with site visitors who have more buying potential.
No. 8: Collaborate With Boutique T.V. Shows For Shoot Locations
Is your commercial property a beautiful space in a serene environment? There could be a cheaper way to advertise. Boutique T.V. shows are always scouting for appealing shoot locations in exchange for credits. By hosting such shows, you can increase your property’s exposure. In addition, you’ll be able to attract tenants who’re willing to pay premium prices due to your property’s affiliation with T.V. To qualify for such an arrangement you need to invest heavily in landscaping and modern interiors, so that your space will provide an excellent background for T.V. hosts. This will ultimately capture the attention of viewers watching the show.
No. 9: Use Catchy Outdoor Signage
Finally, what is an available commercial property without catchy signage outside the building? You’ll be surprised by how much attention this timeless advertising tool can capture. Signage posts have been used for the longest time, and they continue to work despite all of the cutting edge advertising tools that have emerged. A dynamic sign will stand strong right outside your property for as long as you leave it there. It is a less intrusive advertising method, and it’s also inexpensive compared to most other techniques. Just look for the best designer and use eye-catching colors and typography that will stand out to potential onlookers.
Do you have any additional questions or ideas regarding how to secure leases for an emerging commercial property? At RTI Properties, Inc. we specialize in all types of property management throughout Los Angeles County including various commercial and office buildings. Speak with one of our experts today at 310-532-5470 or visit www.rtiproperties.com, if you need assistance with lowering your commercial property’s vacancies, contact our team of professionals