[fa icon="calendar"] 04.28.2017 / by Hunter Strickland
Owning commercial real estate is a great way to generate income along while also obtaining many short and long-term benefits. Of course, this is only true if the building is leased and producing a profit. Letting a space remain vacant for too long is a sure way to kill your profitability. This is why you need to have a well-thought plan in place to ensure your vacancies are filled within a timely manner.
Here are six things to consider when leasing a vacant space:
1. Is Time a Factor?
If time is an important factor, make sure you stress this to your leasing team so they can act appropriately. Think about any upcoming refinance dates, a projected sale date or any other leases that will be expiring soon. By understanding the importance of any time sensitive objects, your team will be able to adopt an appropriate leasing strategy.
2. What “Type” of Building do You Own?
Knowing your market and the type of building you own is important. Every property has a specific type of tenant that should be targeted, based on the location, available amenities, pricing and how the property is perceived.
For example, if you own an office building that houses a large variety of smaller up-and-coming businesses, you can market your building as an “incubator” and attract like-minded tenants and gain referrals.
3. What is Happening in Your Market?
Stay on top of market trends. Not just real estate trends, but business trends as well. This means reading business journals and other publications to see what kinds of businesses are growing so you can target them in your marketing efforts.
4. Where is the Building Located?
You don’t necessarily have to be located on Main Street to attract quality tenants. Think about where your building is located and what other types of businesses or residences are nearby.
For example, if you are located in a financial district, or surrounded by apartment buildings, there is probably a decent amount of foot traffic. Consider marketing your vacant space toward restaurants or coffee shops that would thrive in this location.
5. Can You Offer Incentives?
A great way to speed up the leasing process is to offer incentives to your prospects, such as free or discounted rent for a period of time. You can also consider offering a tenant improvement allowance if the tenant is looking to update the space.You are losing money by letting the space remain vacant anyway, so you might as well offer a discount if it will help you secure a tenant.
6. Should You Hire a Broker?
Whether or not you choose to work with a broker, you should always make the brokerage community aware of the vacant space. All brokers know other brokers and tenants who are looking for a space. In fact, this is their job; to match up tenants with properties that will meet their needs. No single person can ever match the power of the brokerage community, so always consider hiring a broker if you are having trouble leasing a vacant space.
Once you have a plan in place, you’ll have to follow through with it. Make sure you clue your leasing team in on what kind of audience you want to target, what incentives (if any) you want to offer, and when the space needs to be leased by. You’ll be surprised how quickly things pick up with a well-thought plan in place.