10 Tips for Tenant Retention in a Lessee’s Market
- Approach tenants early. In a market with vacancies in the high double digits, start lease renewal negotiations 12 to 24 months in advance.
- Don’t bring in competing tenants just to earn an extra buck. In a tough market, it’s tempting to take any lease, but ignoring noncompete lease clauses can cost you a tenant, get you in a lawsuit, and undermine percentage rents.
- Invest to avoid functional obsolescence. Spending on upgrades may hurt the bottom line over the short term, but improvements will pay dividends in long-term tenants.
- Educate tenants and owners about what the market is doing. Market knowledge about vacancies and any new properties coming online will help keep rent negotiations realistic on both sides.
- Avoid guessing games. Offer a fair deal, use comps to explain your offer, and communicate your position clearly.
- Keep the decision makers happy. The boss and office manager will notice factors such as HVAC and janitorial services. It’s a lot easier to replace a poor cleaning service than a tenant.
- Don’t slack on face time. It’s not enough simply to provide a lot of services to tenants. Being available in person can sway that renewal decision.
- Never go on the defensive. When a tenant calls to complain, you should listen, empathize, and solve the problem. Don’t make excuses.
- Treat an existing tenant the way you’d treat a new one. Take an interest in each tenant’s business and stay in touch with tenants regularly, not just when they complain or it’s time for a renewal.
- Put the real estate first. If a property is well-maintained, it gives tenants a reason to stay.
Source: realtormag.realtor.org
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