Sometimes leasing vacant office space can be tricky during the winter months, especially here in Connecticut. The colder winter months often drive people away, and it can be hard to attract tenants in a somewhat desolate environment.
Vacant properties are too expensive to ignore.
Business space is an incredibly valuable asset and vacant properties aren’t financially beneficial to their owners or the communities where they reside.
If you're trying to find a tenant, there are simple steps you can take to accelerate the process. Here are 5 tips you can follow to find a suitable lessee and lease your space before spring arrives.
1. Review the Lease
Ensure the terms of your lease are within market standards, offer certain amenities and are reasonable for the value. A Triple Net Lease is the most popular type of net lease for commercial freestanding buildings and retail space. It is known as the net net net lease, or NNN lease, where the tenant pays all or part of the three "nets" - property taxes, insurance, and common area maintenance (CAM) in addition to a base monthly rent.
The potential tenant should understand the permitted use of the property and the lease should bind the tenant to this designated use. Likewise, specific limitations or prohibited uses should also be identified. The lease should also detail the obligations of the tenant under the agreement.
Being fair to tenants, while protecting your own financial investment is critical to a happy, long-term relationship with potential tenants.
2. Price To Market Standards
When it comes to leasing property you own, lowering the price below what you consider “ideal” can sometimes be a difficult pill to swallow. To validate your asking price, make sure the terms of your lease align with what’s currently going on in your local real estate market. When doing this research, look at comparable properties and take into consideration the square footage, number of rooms, condition of the finished space (i.e.: is it move-in ready?), etc.
Location! Location! Location!
Property location is critical when looking for comparable, leasable spaces in the market. If you own property in what is considered to be a more rural or suburban area, pricing your space similar to those in more urban areas (which are typically more expensive) will not give you accurate market value since it will most likely be considered overpriced.
If you’re inflexible with lowering rent, you are limiting the number of potential tenants you’ll be able to find. Consider the property’s monthly expenses and the cost of its vacancy (that you’ll have to pay!) for 6-12 months. All in all, lowering your asking rent may actually save you money in the long run.
3. Target Your Ideal Tenant
You should only enter a relationship with a tenant who you feel comfortable leasing your space to. The best way to quickly find a great tenant is to take the time to figure out who that is before you start searching. An educated tenant will have high expectations of their landlord. Identifying a target profile will help you to establish an audience to contact or advertise to, so that you can accelerate the process.
Once you have a good idea of the type of tenant you want, you can ask prospective candidates the right questions and ease the vetting process. The more due diligence you do, the more likely you'll find a great tenant and the smoother the leasing process will go.
Showing you are an honest landlord and that the relationship makes sense to the potential tenant can help secure a trustworthy tenant.
4. Make the Space Welcoming
Another important part of finding a great tenant is making sure the space itself is attractive to potential lessees.
If you are in a position to renovate your space, fresh, modern spaces have the luxury of greater appeal. While there is truth to finished spaces having the perk of higher asking prices, don’t let this intimidate you into needing a full redesign. Ensuring the layout of the space makes sense and is functional for the needs of your target tenants is as important.
If finances prevent you from a full renovation, consider minor changes like fresh paint and be creative when marketing your space (i.e.: highlight its potential). Use neutral color palettes since bright or bold colors can be off-putting. Being open to providing allowances for tenants to make their own renovations after they’ve signed a lease can be beneficial as well.
Consider the way you are marketing your space. Does the interior reflect these uses? If you are targeting medical tenants how does the interior “speak” to this population? An interior designer can help create a visual story that helps to “sell” the space through staging.
Another great tip is to have professional photographs taken to maximize the appeal of your space when advertising to draw in potential lessees. Be sure to have everything professionally cleaned before any showings or photographs to put your best foot forward.
5. Consider Multiple Uses
You may have one particular tenant profile in mind for your property, but there may be other potential uses for the same space. For example, perhaps you look at your space and envision office space for a medium sized business…but maybe it could be used as a medical office. Or maybe you think the space calls for a restaurant client, but if you reimagined the layout of the environment it can potentially serve any number of other business types.
Hiring a space planner can help you ideate and consider different potential uses for the space you own. Having this open-mindedness and creativity when it comes to marketing your property can largely widen your target audience. And with a larger audience, your number of potential tenants increases, making the entire process much faster.
Tenant fit out services help ensure potential tenants can fit comfortably in the space. Ensuring the square footage is accurate allows tenants to compare new to their existing space. Sometimes with proper planning tenants can even fit in less square footage! Get a jump on your spring cleaning and let Design Your Monday help you maximize your rental income and lease your space before spring arrives.
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