3 ways to improve commercial tenant retention
Property operators know that effective commercial tenant retention and engagement doesn’t end when the lease is signed. It involves an all-encompassing approach, merging together the processes of attracting prospects, retaining them, and renewing them.
The first step in a successful commercial property management strategy is to maximize and improve your tenant engagement practices.
1. Attract the right prospects
You don’t just want to fill your spaces with any tenants – you want to fill them with productive tenants; tenants who will bring value to your commercial property.
To begin the process of attracting tenants, you should be taking stock of the different business relationships you have, and asking yourself questions such as “What are these people currently doing?” and “What kind of spaces might they be looking for?” Having this ability to essentially take the temperature of the business climate is key in helping you gather follow-up information for possible referrals.
Another critical aspect of attracting new tenants is storing and utilizing data. Keeping track of data allows you to track the deals and activities you’re undertaking, the leads and opportunities you’re pursuing, and the amount of space you have to match those opportunities. But it’s not just enough to have the data on hand should you ever need it – you want it to be accessible; to have it at your fingertips should you ever need to respond to opportunities at a moment’s notice. Real estate technology solutions like MRI’s Commercial Management software can help you maintain data integrity and keep track of the opportunities you have in the pipeline.
2. Retain tenants
Once you succeed at attracting a prospect, the process of becoming a tenant starts with lease negotiations, where you’ll nail down details regarding terms of a lease, duration of the lease, and what ground that lease will actually cover. The goal in lease negotiations should be to streamline the lease process as much as possible by pulling key information out of the leases and tracking it in industry-specific software that can help maintain data integrity.
Data integrity is crucial as you manage your commercial real estate property, but especially as you turn a prospect into a tenant. There will be plenty of different terms, obligations, and conditions between both parties, and maintaining good visibility into those terms will help you maintain a healthy landlord/tenant relationship and make informed decisions.
3. Renew leases
As stated before, engagement doesn’t end once a prospect becomes a tenant. Attracting a brand new prospect is actually more expensive than renewing the lease of a current tenant, making retention the final step to great engagement strategy.
When it comes to renewals, it’s important to maintain the visibility that has marked your process so far in the lease lifecycle. Clarify specific dates and deadlines in the lease related to your renewal process so that renewal is always on the top of a tenant’s mind.
It’s also important to remember that no matter how many steps you take in the days leading up to the renewal date, tenants will usually only renew if they’ve had a positive experience. Have payments and service requests been addressed in a timely manner? Does the tenant have visibility into your operating activities? Is the information they receive complete, and what kind of experience have they had at your commercial property? These are all questions that play a role in a tenant’s decision to renew a lease.
Reviewing your tenant engagement practices in your commercial property management is not always something that stays top of mind, but it needs to be. The time of the absentee landlord is over, and the time of the client-facing commercial operator is here. To learn more about commercial best practices and the tools you can utilize for property management and tenant engagement, check out MRI’s comprehensive suite of commercial products.
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