How to Price Your Space to Earn the Most Income
Picking the perfect price is like a superpower. By changing a single number—your price—you can instantly change how customers see your space….Read More
You need to know everything you can about the commercial real estate market before you even think about leasing. What is the vacancy rate for commercial properties in your area and region, for example? What are the market rates for commercial properties like yours?
If it’s an office building, you need to know how much office buildings in the area leasing for per square foot on average. If you own a warehouse, you need to have comparable data on how much warehouses lease for. Do not assume all commercial properties have the same vacancy rates and lease costs per area.
When considering prospective tenants, be sure you know what your properties are zoned for. Zoning laws and regulations change regularly, so be sure you update your knowledge for every new tenant. Leasing to a business in an area not zoned for it is not going to be viable long-term for you or them and can result in fines and fees.
Is your building set up for any technology needs your tenants may have? Generally, the answer should be yes. But if your building is older, you may have to upgrade the wi-fi or cable lines to attract high-paying tenants. Access to the digital world is increasingly part of the lifeline of companies of any type. If you need to retrofit, be sure to advertise the new state-of-the-art technological capability.
Leasing a commercial property takes a great deal of asset management. Asset managers can give you advice on a spectrum of issues that arise in commercial property leasing, ranging from market knowledge to making improvements, doing regular maintenance, watching the financial achievements of your tenants, and proactively monitoring upcoming lease rollovers. If you hire a company to handle your asset management, they can also execute projects ranging from upgrading parking lots to expanding building size. Asset managers can also ensure your buildings are sustainable and perform energy audits.
Some commercial property owners act as their own property managers, inspecting the building and receiving monthly leasing fees. Others contract the work out, either to asset managers or to specialized property managers. If you currently act as a property manager for your buildings, is it time for a change? What outside services do you need or want property managers to handle if you engage them?