Are you a professional juggler? If you’re managing commercial real estate, you certainly are: when you’re working with tenants in multiple commercial properties, you need to find a way to make all of the pieces come together to ensure business success. Here’s how to face some of the unique challenges of commercial real estate management.
1. Controlling Your Vacancy Rate
When you’re managing residential properties in different areas of the city, you don’t tend to have a rash of vacancies. People move in, people move out, and while some of your vacancies can be tied to economic trends or predictable seasonal changes like the college schedule, for the most part, your vacancies are unconnected.
When you’re managing multiple rental properties in the same commercial space, you can experience true challenges if a key tenant moves out or if more than one tenant decides to give notice at the same time. You need to work to maintain your existing tenants and find new tenants that work well with everyone else when a property becomes vacant.
2. Determining Your Tenant Mix
Every tenant relies on the others to create a commercial complex. You need to bring on tenants who contribute to your retail mix, bringing food, small convenience stores, and niche stores into your commercial property. Establishments such as yoga studios, gyms, and beauty salons bring tenants to your property for a long time, while convenience stores bring many different tenants for a shorter visit. Your role is to bring in tenants who will complement each other and turn your commercial real estate into an attractive place for customers and tenants alike. Working with a management company can help you find the right match, since management companies also work with multiple tenants seeking rental space.
3. Understanding the Rental Market
When you’re working in commercial real estate, you need to have an intimate understanding of the local rental market. Tenants are price-sensitive, and they also need specific amenities, whether it’s parking or a large space for deliveries. You need to understand the rental market as a whole, but you also need to know how the unique features of your specific property work for and against it. Pricing your properties right will allow you to attract and retain the best tenants. Working with a property management company can give you additional insight into pricing in the local market, since a property management company is familiar with pricing a wide variety of locations and properties.
4. Marketing Your Properties
To get the best return on your investment, vacancies will need to be priced well and listed on the appropriate sites to gain the highest exposure to prospective tenants and outside brokers.† Many details impact pricing a space: demographics of the local population, location/visibility, traffic counts, surrounding businesses and many other items.† Hiring a management firm to market your space will give you a competitive edge toward success.
5. Implementing Tenant Screening
You want to make sure that your property and your tenants are a good fit for one another, but you also need to keep your property rented. Choosing the right tenants is often more important than getting high rent or keeping a constant flow of tenants in your property. In addition to credit and reference checks, look for tenants who bring a unique brand to your property. A tenant who can create a draw for new visitors who also complement other businesses in your commercial complex is a valuable tenant indeed.
For instance, a brunch restaurant could match well with a salon, spa, or health center or a gift shop. As a commercial property owner, you need to screen tenants not only for their financial history but for their business history and cast an eye on the ways that they’ll build up the business for your entire property. Working with a management company can help you find the right tenants for your property, run your traditional screening processes, and take care of tenant needs — leading to greater tenant retention.
Protecting your assets is top priority.†Make your rental property management simpler: contact Lori Gill and Associates. Whether you’re trying to rent your space or manage your existing retail spaces, we can help you with the details so that you can focus on strengthening your portfolio. Connect with us today.