As a commercial property owner, it is essential to locate the ideal tenant for your property to ensure a profitable investment. An excellent tenant not only pays their rent on time but also compliments the tenant mix, cares after the property, and attracts potential customers to your commercial space.
On the other hand, an unsuitable tenant may cause damage to the property, violate the lease agreement, or create a negative atmosphere for existing tenants. Therefore, it’s essential to know the proper steps to find the right tenant for your commercial property. In this article, we’ll discuss the recommended steps to find the best tenant for your commercial marketplace.
Advertising has radically changed in the information age, with many new avenues available to promote your commercial spaces. Prior to advertising your property, you should be familiar of the trade area and the nearby competition. By defining your target uses, you can narrow down the prospective tenants. Who will add daily traffic to the center?
Considering the type of property you own, its location, and the amenities it offers, will determine the most suitable business for the property. For instance, in the busy hub at Concord Square Shopping Center on Concord Pike, finding the right blend of retail, hospitality, and relevant anchor big-box stores is important to attracting multiple types of consumers who visit multiple businesses in the center.
Once you have defined your target tenant, it’s time to advertise your property. There are many ways to do this, including online listings like Loopnet and Costar, promoting on social media sites such as LinkedIn, and even utilizing on-site signage. Make sure to provide detailed information about your property and highlight its unique features, including its size, location, and amenities. Utilizing high-resolution drone photos and videos is not only a must-have but also the new standard for digital advertising.
When you receive inquiries from potential tenants, it’s important to screen them thoroughly. Develop a custom list of questions to funnel their inquiry into a potential fit; are they a national corporate tenant, a franchisee, or a local start-up?
The potential client should be able to provide a business plan, including financial projections to verify that the business is viable and will be successful.
If you have found a suitable tenant, it’s time to negotiate the Letter of Intent, or LOI. This is a critical step in the process, as it will set the basic terms of the agreement between you and the tenant. This will contain the main points of the lease and define crucial terms included in the lease.
Once the lease is signed, it’s important to maintain a positive relationship with your tenant and their team. A good landlord-tenant relationship can lead to a long-term lease and a successful partnership. Having a well-developed and professional property management department will lead to building a productive relationship during day-to-day operations.
Conclusion
While there may be dozens of potential opportunities to fill a commercial space, remember that the right tenant is not just about finding someone who pays rent on time, but also someone who takes care of your property and is a good fit for your shopping center. By following these steps, you can ensure that you have a successful and profitable partnership with your commercial tenant.
Written by Stephen Geer, Marketing Manager, Capano Management