Property Managers – Invest in Good Commercial Tenants at Lease Negotiation Time


When it comes to commercial and retail property performance, the tenants that you choose to fill your vacancies should be a clear match for the property and the tenancy mix. To do this it pays to have some clear directions and targets in finding new tenants. Not all tenants will qualify.

Here are some ideas to help the tenant selection and negotiation process:

    1. Look at the other tenants in the property to identify the customers that are already visiting the premises. It is possible that your new tenant could benefit from the existing customer profile.
    2. Any new tenant to your property should be able to give you some tenant or business history from other premises. In such case you could review their business success and stability. As part of that, get the tenants approval to talk to the previous landlord or property managers to see that your tenant today is all that they say they are.
    3. Review your tenant mix and understand the ideal tenant profile that will suit the others surrounding the vacancy. Your review should include lease term, expiry, permitted use, and renovation obligations.
    4. The negotiation of a lease involves critical factors that impact the landlord’s cash flow. They include rent, rent review dates, rental type, options for a further term, lease incentives to be offered, and outgoings recovery. Planning the negotiation for the lease should involve clear and effective benchmarks with these things, so the lease negotiation can achieve the right outcomes for the landlord.
    5. A franchise type tenant may bring you a business identity that benefits the property. Whilst that is a positive thing, make sure that the franchise operator is of suitable experience to build and operate a good business.
    6. If your property has one or more anchor type tenants, then ensure that your choice of tenant is a clear fit into the anchor tenants business operations and location. The anchor tenant was located into the property as a major attraction or identity for the property; given that the anchor tenant will typically have a longer lease than others in the property, you should protect and complement the anchor tenant with any new tenants that you take to the property.

When you select good tenants to move into your commercial or retail property, you help the property cash flow for the landlord and build a case for a better price for the property at the time of sale. Make your tenant choices wisely.

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Memphis Buy And Hold is¬†specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 8 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More……


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