Leasing commercial and retail property is special and diverse when it comes to comparing it to something like property sales. For this reason your proposal and marketing plan in leasing and project leasing needs to be very different.
Most particularly it has to deal with not only the marketing that is recommended for the vacant space, but also the strategy of the lease to suit the investment plan. Landlords can be greatly assisted when you adopt this mindset. The property can also perform better over the long term.
A lease deal should not be looked at singularly, but as part of the bigger property. When you do this, your leasing service and point of difference becomes quite real and relevant in the market place. In other words you can win more business because you are providing a better service opportunity to your clients.
Leasing is not just about rents and getting the lease signed, it is about how the lease balances with other tenants in the building, optimises the rental, reduces vacancy exposure, and strengthens the value of the property.
So when you construct a proposal to lease a property, having a mindset that reflects these extra perspectives will help you greatly. The following is a format of a lease proposal for a quality commercial or retail property.
- An Executive Summary of one or two pages is highly valuable. This is always at the front of the document and should highlight the key issues that make the property different and unique when attracting tenants. When you construct this correctly it helps the client into the rest of the document. Remember that most clients do not read the proposal in its entirety, so the Executive Summary is the only way to attract them further.
- Description of the property should be towards the front of the document so that the landlord understands that you have all the facts correctly addressed. What you need to do here is describe the property from a leasing perspective covering services and amenities that will be an advantage to and in attracting the occupants. Remember that tenants today seek quality in occupancy and view services and amenities within the building with great relevance.
- Client’s needs and brief should be outlined. In this way the client knows that you really understand what they want and need.
- Survey competition properties with vacancies and give your client an understanding of how you want to compete and attract tenants to your building.
- Packaging of areas to lease and the ideal sizes of lettable space are important decisions. What you want to do here is stage release the space in bundles that attract enquiry. It is a bad practice to release all the space at the same time. Your rentals will be harder to achieve and support. Split the property up into a number of stages and set the rentals for each.
- Prospective tenant activity in the local area needs to be identified. The landlord needs to be aware of other tenant activity in the area together with any other properties regarded as competition. A resume of the rentals and the lease terms offered will be required. Sometimes it is also useful to get a copy of the brochures from the other properties to see what you are up against.
- Methods of lease are variable. This suggests that you should specifically recommend the type and term of lease to be adopted in the property. Due regard should be given to the local precinct and other properties surrounding. What you don’t want is a lease expiring at the same time as other major properties in the area. This just creates a competition in rental and unnecessary incentive when the landlord doesn’t need it. Always think ahead when it comes to lease construction.
- Provide the client with a list of recommendations and changes that should be considered prior to the marketing of the property. When the marketing commences, your everything to be presented well and packaged correctly to attract tenants.
- An information memorandum of the property detailing matters relevant to the tenants will need to be prepared and approved prior to usage. Landlord should review and approve the document as part of this process.
- Most appropriate rental level, rental type, and incentive should be qualified with market evidence. By this we mean gross rents, net rents, levels and types of incentive to be offered, and even the guarantees that should be sought from the tenants. Stability is the ultimate focus here for the landlord. The rentals and incentives that you choose should be standard to the region and in parity with the market. What you want to do is provide a great property at a competitive rental.
- Achievable rental levels and rental range should be explained. Every lease deal will be different, and for that reason you should provide the landlord with a rental range in which you can operate. There is often a trade-off when you have to give the tenant aren’t all regarded as low in the marketplace.
- Exclusive agency agreements in project leasing are essential. In only this way can you attract correct levels and types of tenants that the property requires. You can also centralise the enquiry back to the landlord in a meaningful way. The exclusive agency agreement in the project leasing appointment should be for a lengthy period of time. This will normally be six months or perhaps longer.
- Advertising and marketing strategy should be clearly defined. What you need to do with your marketing is attract the right target market of tenant who can pay the rentals. Further to that, higher quality tenants give the building a better profile. When the property is to be marketed for sale at a later time, this tenant profile will be of attraction to purchasers.
- Last but not least, indicative commissions and fees should be explained to the client given the types of leases that you could undertake. The fees should differ between the lengths of leases undertaken. The longer the lease term, the higher the fee given that you are providing the property with a long-term stability of cash flow and a great tenant. Do not be afraid to ask for a reasonable fee and stick to it. Any client that chooses an agent based on lower fees does not really understand the big picture. A cheaper fee will not focus the agent to the task. Time on market extends and the property then becomes stale.
When you give special attention to your leasing proposal and make it highly relevant to the client and the property, you will be able to close more listings. Your stock and marketing approach gives a better profile in the area and more business starts to come your way.