High Associates Blog Tenants are people too: Four keys to success ...

Published by High Associates. on June 26th, 2012

There seems to be a widespread notion that commercial real estate owners are void of emotion, focused strictly on business with their only goal to make money regardless of the preferences of others. While this may be true in some instances, it is not the philosophy of all, and it certainly is not the most productive approach to commercial real estate investment.

So what are?the keys to success?

?

Success Key #1 ? Show and Earn Respect

We have all heard that location (in triplicate) is the most important factor when referring to real estate, but what about people? People make the decisions, people occupy buildings, and people pay rent. It is true that location is very important, but so are people. Tenants are people, to state the obvious, and like all others, they have needs and preferences.

The landlord who meets these needs is the one who will be successful in leasing space. When a landlord leases space to a tenant, the real estate is considered to be an investment property or income-producing property. This type of investing is a relatively simple concept. To generate a profit, the property has to generate enough income to exceed the building expenses. Income is primarily generated through leasing (renting) space to tenants. The object is to keep tenants in the property paying rent, because vacancy is a direct loss of the primary source of income. So success key #1 is to treat the tenant with respect so they will be more willing to lease your space.

Success Key #2 ? Define Needs

A landlord who keeps buildings occupied and generating income has successfully found the link to meeting tenants? needs, as there is a direct correlation in this equation. This is done by building relationships through communication and understanding. ?A good landlord is willing to listen to their tenants and work together with them to find mutually agreeable outcomes. The primary objective of the property owner should be to define each prospective tenant?s requirements and the priorities of those requirements. Of course, rent will be a primary concern; however, rental rates are driven by the supply and demand of the market and relatively consistent across competitive properties. So as long as the landlord charges a market rate, other factors will determine where a tenant leases space. That is why it is important for a property owner to get to know their customers. By asking questions and getting to know the tenant, a landlord can often discover the hot buttons that determine the outcome of the tenants? leasing decisions. There are many factors that come into play when leasing commercial real estate ? parking, accessibility, visibility, signage, co-tenancy, building construction, functionality, efficiency, utilities, amenities ? and the list goes on.? If a landlord can discover the factors that are most important and work with the tenant to meet those needs, they will be successful in leasing space.

Success Key #3 ? Develop a Good Working Relationship and Establish Trust

A good working relationship is even more important in retaining tenants. Tenants remember how they are treated. When a property owner listens to their tenants and does what they can to meet their requests, relationships are strengthened. In turn, if a property owner ignores the tenants? concerns, this factor will be remembered when time to renew, or not renew, a lease. Simply put, if a tenant feels they are being treated fairly and can trust their landlord, they will be much more likely to stay.

Success Key #4 ? Appreciate the Broker?s Role

In commercial real estate, a large percentage of leasing transactions involve real estate brokers. Guess what ? they are people, too! They remember their experiences with property owners, and they communicate with potential tenants as well as other real estate agents. Not only is important for the property owner to treat tenants fairly, they should be equally fair to the brokers involved in transactions. Real estate brokers may represent tenants and/or property owners and are an integral part of the leasing process. Therefore it is very important to establish strong relationships with them, too. It?s likely that they will be involved in another transaction in the future, either directly or indirectly.

The Bottom Line

Fairness, understanding, and earning trust are qualities that separate successful commercial real estate investors from underperforming owners. If a property owner is inflexible and unreasonable, tenants will go somewhere else. Good people make good landlords, just as good people make good tenants and real estate brokers. Personal relationships are an imperative part of leasing, and building trustworthy relationships is an invaluable key to success. ?Location, location, location? may be the most common adage in real estate; however, ?people, people, people? is the most important in successfully leasing, representing, or owning commercial real estate. ?

Gregory Cassel, Commercial Asset Manager, High Associates Ltd.

Tags: brokerage, commercial real estate, CRE, Gregory Cassel, High Associates, High Real Estate Group, Lancaster, Pennsylvania, sustainability

nl mvp nl mvp verlander verlander justin verlander pepper spraying cop pepper spraying cop