Owning commercial property often means facing vacancies at some point. When that happens, consider the opportunity to rescue the occupancy. Take, for example, one of our long-term clients who recently renewed their lease with our guidance. We took an unconventional approach by advising them not to exercise their option to renew. Why, you ask? Because we believed we could secure a better deal from the owner outside the confines of the standard lease terms. Our hunch paid off; our client renewed at a remarkable 8% below the lowest market rate. The owner also avoided the costs associated with vacancy, potential refurbishment, tenant improvements, and increased brokerage fees. It was a win-win for everyone involved.
But let's face it, not every vacancy can be saved. When you can't salvage the occupancy, you'll likely need to engage a commercial real estate professional to find a tenant or buyer who can represent your interests in the market. The question is, how do you find the absolute best professional for the job?
Here's a simple guide to help you find the perfect match:
Define Your Reality
- Is your property vacant or occupied, and if occupied, will it become vacant during marketing?
- Are significant improvements needed, like office refurbishments, equipment removal, or major repairs?
- Are you a seller or a landlord? What's the debt against the property?
- How long can you afford to keep the building vacant?
- If you're the occupant, where will you relocate, and what's your showing protocol?
- Successful commercial real estate professionals often specialize in a particular location or building category.
- Consider the type of property you have - office, industrial, or retail, and its sub-category.
- For example, if you have a manufacturing building in Anaheim, California, look for a specialist in selling or leasing manufacturing buildings within a specific radius.
- Ask specialists for a list of comparable transactions they've completed and currently available properties.
- However, remember that competence matters as much as quantity. Ensure the specialist is a reliable representative for your property.
- Assess the competition in the market. A knowledgeable specialist should provide insights into available competing properties.
- Request a tour to understand how your property compares and to gauge the specialist's market expertise.
- Check with the specialist's main competitors for their take on the specialist's reputation and competence.
- Keep in mind that their competitors might have potential tenants or buyers for your property.
- Look for a specialist who can offer unique marketing strategies tailored to your property.
- Beyond the standard tactics, seek someone who thinks creatively and can make your property stand out.
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