Commercial Agents – How to Negotiate Leases in Commercial Property Today

When it comes to commercial property leasing and performance, the lease that you negotiate is really a key part of the process. Lease negotiation today can be protracted and lengthy. The landlord and or the property manager need to be aware of lease negotiation practices that apply to their property type and local area, and have a system to implement when they are leasing vacant premises.

At the outset, it should be said that a good property solicitor is highly valuable to the lease negotiation process. The commercial real estate agent is really only there to negotiate the lease and is not a lease preparation specialist. The agent brings the parties together through a comprehensive marketing campaign targeted to the right type of tenants. That is why they are paid the commission. The solicitor should then take over the lease documentation process to ensure that a correct and comprehensive lease document is created for the particular occupancy situation.

There are many types of landlords out there owning diverse and different properties. Regrettably the smaller property investors commonly tend to cut corners in legal costs or seek low cost lease documentation. The end result is a lease document that generically relates to the property.

It is best to get a solicitor involved in each and every lease document after the agent has negotiated the basic elements of the lease. A heads of agreement is appropriate for this process and that agreement can then be given to the solicitor to structure final documentation in legal form.

Here are some other main elements to consider in negotiating leases in commercial or retail property:

  1. Form a decision as to how long the premises should be leased in the initial term. This term should comply with the changes to the property that the landlord requires including any refurbishment strategies or relocation situations.
  2. Many landlords do not like options for a further term being given to tenants. Whilst you have to comply with property legislation relating to leasing, the issue of options really does need to be considered before the tenant asks for such. Options should only occur if the landlord can comfortably allow the tenant to remain in occupancy in the location. Due regard should also be given to the other adjacent tenants in occupancy and their needs for expansion.
  3. The type and amount of rental to be asked for should be clearly set before the marketing of any vacant tenancy occurs. Whilst it is permissible for a landlord to negotiate rental downwards, it is important that the asking rental is comparable to market rental; otherwise you won’t get any enquiry from the marketing of a vacancy.
  4. Understand the outgoings for the premises and how you are going to recover those costs for the landlord. The decision here will have impact on the net and gross rents that you may select.
  5. Prepare the premises for inspection and presentation. Whilst many landlords prefer to not spend any money until tenants are found, this process can be counterproductive and dissuade tenants from entering into negotiation for the vacancy. Essentially a vacant tenancy needs to look its best before tenants are taken through for the inspection. To achieve this you may need to paint the premises, reinstate the ceiling tiles, and replace the floor coverings.

The negotiation of a commercial or retail property lease is a planned process. By taking these and other steps early you can reduce the number of problems that you have in the lease negotiation process.

Commercial Agents – Tips for Advertising Commercial Property on the Internet

When it comes to advertising your commercial property listing on the Internet, the strategy you adopt is really important given that many other properties will be similarly listed in the same general location or suburb. In other words each listed property has to be individually optimised for the internet advertising process. If you want enquiry from your marketing efforts on the internet, then you have no choice.

The Internet is one of the most convenient and effective ways to advertise commercial and retail property today. It is cost effective and conveniently accessed by the people looking to buy or lease property. Just about every property that is available for sale or lease will be placed on the Internet, so you have some competition to handle and position against.

In any given suburbs and for any property type you are likely to have 50 or more properties competing against you as the salesperson or property owner promoting the property; sometimes (and in the case of CBD or capital city property) this number is even more difficult.

The numbers can be stacked against you as the marketer of property. This is where the expertise and experience of the commercial agent becomes crucial to the marketing and promotion process.

Today you can simply not advertise the property and hope that the results will come in the door or a cross the telephone. You need to think about the Internet Marketing process as it applies to the particular property listing and then you need to apply particular processes and strategies.

Here are some ideas to help you:

  • List your property on industry based websites that are well accepted and proven promoters of commercial property. Get some statistics from each of the website portals to understand their positioning and results on the search engines.
  • Design the adverts for the property around the relevant features, improvements, and location. To achieve this, you really do need to understand the target market that will be attracted to the property. The advertising needs to be appointed to the target market in a way in which interest can be optimised.
  • Use keywords within the property advertisement that are used currently in accessing properties through the search engines. You can do a keyword search with most of the search engines to understand the types of enquiries that are being made currently.
  • You can pay for priority placement in some of the search engines and commercial property website portals. This comes at a premium but is very relevant for quality properties.
  • Send out emails to your database and prospects, with links to the particular property advert on the internet. There are some good software packages available that do this very well. Track the opens and the hits on the email.
  • Break the advert down into simple form and presentation. Dot points that feature the attractive aspects of the property should be used in preference to the long and drawn-out sentences that we have seen in the past.
  • They say a picture is worth 1000 words. When it comes to property advertising, the observation is relevant and a real. As part of your marketing campaign, get some professionally prepared photographs of the property taken at the best times of day. One or two photographs should appear at the top of your advertising.
  • Develop a caption to place consistently across all the advertising material. The caption should be relevant to the target market and attract interest.
  • Make it easy for people to contact you to make further enquiries. It is questionable whether the address of the property should be placed on the advertisement. This can sometimes lead to lost enquiry not reaching the agency. In simple terms you want people to ring you. When they make contact, you can optimise the enquiry and qualify the inspection.
  • The method of marketing and advertising on the Internet should be optimised for the first three or four weeks of the advertising campaign. It is a proven fact that most enquiry with most property types come to you during this period. It is also a known fact that most people tend to review properties listed on the Internet between the days of Wednesday and Saturday in each week. If you track your website hits, you will likely see that this is a proven fact.
  • Every property listed on the Internet should have the page hits tracked from the start of the campaign. In this way you will know how a particular property is comparing to others that you have listed. If you cannot see reasonable improvement in Internet hits from the start of the campaign, then you should review the advertising for different wordage and placement.

As a permanent and long-term strategy for your personal Internet profile, it is best that you write industry based articles about your property type specialty and location, and then place them on a personal blog. Providing you adopt this strategy regularly, you will find that the personal profile of your name and property specialty will improve. This will have benefits across all the search engines and potentially lift the levels of enquiry you get from the Internet.

Commercial Agents – Key Sales Pitch Tips and Objectives

Before you as a commercial property agent do a sales pitch to a client to potentially list their commercial property, it pays to understand and set the strategy you will adopt. You need to define your targets of the process. Clarity is important.

Given that each property is different, the strategy and your sales pitch should also be distinctly different and unique given the elements of the property and the circumstances of the market. You are the expert agent and you need to show exactly what is going on out there today.

Here are some ideas and processes to feed into the presentation:

  1. Firstly get to the real facts of the client and their needs today. They will have special concerns about taking their property to the market today. They will also have certain criteria that must be satisfied for the marketing and negotiation to be successful. Ask the right questions until you really know what they want to do and why.
  2. Given the previous point above, develop a clear understanding of just what the target market is for the property today. As the local agent you should have a database that gives you a typical profile of the enquiry coming in to your office at the moment and how it can be converted to the property.
  3. The defining of the target market will give you specific ideas as to how you can reach the target audience through direct marketing and consistent effort.
  4. Take plenty of photographs around the property before you see the client. You can then put the images on a rolling slide show on your laptop computer to supplement your discussions with the client. Given that the photographs are only of their property, it tends to attract their attention far better than any other laptop use or presentation material.
  5. Have some market evidence and comparable property detail to show the client and to support your discussions. Real numbers and facts from the local area are hard for them to refute.
  6. Carry a variety of marketing examples of similar local properties today. Show the client just how you would use the material to the best of its advantage in attracting more enquiry and better inspections to their property.
  7. Tell the client exactly what the market is looking for today and how you will use that to your advantage in marketing their property.

Far too many agents approach the pitch process generically without much planning. Given that you only spend a small amount of time with the client in the presentation and that the other agents in the local area will be pitching for the same listing, you really do need to think about the sales pitch process before you see the client. Preparation is the key.