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How to Find a Tenant for Your Commercial Property.

October 06, 2021
servis commercial lease

Whether you like it or not, winter is coming.

The most important factor to consider when staring down the barrel of at least 3 months of sub-zero temperatures is preparedness. Here are a few helpful tips that will keep you (and your property) on track and worry free as we move into the holiday season.

 

1. Know your roof’s maximum snow load

When it comes to the weight of snow, the type of snow is as important as the depth of the snow. Fresh powder snow is typically lighter than wet packed snow, and ice is heavier than snow.

There are several contributing factors to the acting load on your roof that include snow drifts from adjacent buildings or mechanical equipment, heavy rain on snow, and melting snow that refreezes.

If you don’t know your roof’s snow load, hire a structural engineer to verify the snow load threshold of the roofing system. This information will be important after an event when determining if there is too much snow on the roof.

 

2. Prevent plumbing from freezing

  • Inspect and seal or repair all cracks, holes, leaks, windows, doors, and other openings on exterior walls with caulk or insulation to prevent cold air from penetrating the wall cavity.
  • Insulate and seal around attic penetrations such as partition walls, vents, plumbing stacks, and electric and mechanical chases.
  • Make sure your pipes in hard-to-reach places like attics, crawl spaces, and along outside walls are insulated. Wrap pipes and faucets in unheated or minimally heated areas of the building.
  • Make sure your existing freeze-protection devices and alarms are in good working order.
  • Test freeze stats (low temperature sensing device) and valves before the weather gets cold.
  • Pipes leading to the exterior should be shut off and drained at the start of winter. If these exterior faucets do not have a shut-off valve inside the building, have one installed by a plumber.
  • Hire a licensed fire protection specialist to conduct routine maintenance on your sprinkler system. Discuss the systems exposure to winter weather and potential mitigation options.

 3. Winterize your landscaping and irrigation

  • Keep all bushes and trees trimmed and away from the building. Trees with branches near or hanging over your building can damage the roof cover, siding, and windows.
  • Pay particular attention to trees within falling distance of overhead power lines leading into the property. Avoiding a power outage can save a day or two of business interruption.
  • Shut off and drain irrigation systems and outdoor hoses.

 4. Maintain your HVAC system

  • Schedule preventative maintenance and make sure the system is operating properly and efficiently.  Be sure to change any air filters and check that exhaust gases are being ventilated properly.
  • Select a heating system repair service before an unexpected outage or maintenance issue arises mid-season. Loss of heat for even a few hours could significantly disrupt your business during a cold snap.
  • Have someone ready to come quickly – including after hours – and negotiate an emergency rate in advance.

5. Service your generator.

The time to maintain a generator is well before a major snowstorm or disaster strikes (when professional assistance may be unavailable, power lines are down, and access roads are blocked). Backup power can help maintain a consistent building temperature and reduce the risk of freezing pipes leading to business disruption and damage.

 Permanent:

  • Permanent generators should have a proper maintenance plan that includes weekly, monthly, and annual checks. See the manufacturer’s specifications for more information.
  • Run the unit weekly on its maintenance plan to ensure it is properly functioning in case of an emergency. Individual units may have a timer that allows a programmed test to be scheduled. Qualified personnel should oversee these scheduled weekly tests.
  • Check the generator enclosure for loose debris or other conditions that could cause the unit to not function properly.

Portable:

  • Store in a dry location.
  • Set up a maintenance schedule to include periodic test runs for the unit

6. Check your roof and gutters

    Water that does not properly drain off a roof has the potential to freeze, adding to snow load and creating ice dams. Ice dams can add significant additional loads to the roof and could cause interior water damage if left unattended. It is important for your team to maintain the roof drains and gutters.

    Low slope (flat) roofs:

    • Inspect roof and repair leaks before winter season.
    • Remove all debris and other items from roof and roof drainage systems that prevent drainage of water from the roof during the melting process.
    • Check that all flashing and seals are flush and secure.

    Steep slope roofs:

    • Inspect your roof and repair leaks before winter season.
    • Secure loose shingles.
    • Check roof-edge waterproofing and seal to prevent potential drafts.
    • Add extra insulation in your attic or surrounding areas.

    Gutters:

    • Inspect gutters and ensure they’re secured to the building. Replace any missing gutter fasteners.
    • Clean gutters and interior downspouts thoroughly, removing all debris and unclogging drains.
    • Run test of gutters and downspouts to be sure water does not back up. This can be done by using a hose.
    • Check downspouts to ensure they divert water away from the foundation.

     7. Create a business continuity plan

    • Have a plan for communicating with employees across multiple channels (text, email, phone).
    • Have an emergency/recovery plan that is communicated to employees, customers, clients, delivery, etc.
    • Create a snow and ice removal plan for all roofs and grounds.
    • Plan for emergency snow removal in event of heavy accumulation. Identify and supply proper equipment and check it in advance of predicted snow.
    • Some businesses rely on on-street parking, so develop a back-up plan for nearby off-street parking if the municipality imposes a parking ban on streets (for plows). This occurs more frequently in the north, even hours before snow is expected, so they can pre-treat the roads.
    • Purchase and be ready to add non-slip water absorption mats to all entrances for both your employees and customers to capture water and snow as they enter your business and to minimize slips and falls.
    • Test/practice the plan.

    8. Check your insurance coverage and inventory valuable equipment

    • Know what your insurance covers and what it doesn’t
    • Keep your insurance agent’s contact in your phone
    • If you have a loss due to a winter-related event, you’ll have to itemize your losses for your insurance company. Take a complete inventory of your home and store it somewhere safely offsite.

    NOTE: Check in with tenants regarding any maintenance requests or building concerns they may have. Living or working in your commercial property means they are on constant alert to their surroundings. If they see, hear, or smell something, ask that they say something.

    Few things are more stressful for commercial property owners than having an unoccupied building or unit going to waste. That empty space represents potential rent lost for every day or month it remains vacant. Finding the right tenant, especially in a pinch, can be a frustrating affair. You want to fill up your untenanted property with someone who will treat it with respect and reliably pay their rent, but finding such lessees on a moment’s notice is easier said than done.

    Realistically, there is no universal strategy for locating the right tenants; rather it is critical that you take a personalized methodology to find the right kinds of tenants. Plenty of fantastic business units remain unoccupied, not due to their condition, but because the property manager’s inability to market the location to the right audience. So, how do you find tenants for your commercial property? Find out what tenants are looking for here.

    What are Customers Looking For?

    When a business is looking to lease a commercial space, they will do so either on their own or will hire someone to help them. Since many cities have a plethora of spaces available for rent, prospective tenants can and typically will be discretionary about the process until they find a spot that meets a majority of their parameters. By understanding their needs, you can narrow down your list of suitable occupants. Topics to consider include:

    Customer fit – Is the spot located in a place that will draw in their archetypal customer? Does it have foot traffic? Is it in a nice location? What is the surrounding area like? A potential restaurant is going to care far more about being a walkable distance from other popular locations than a CPA office. Even a casual restaurant bar will likely want to be situated in a less affluent area than would a fine dining, Michelin Star restaurant.  

    Ask yourself, “What type of business your location would be suited for?” It is pointless to court businesses that rely on factors that your location cannot provide. To maximize success and efficiency, try and ascertain the type of business that would best utilize your space.

    Property type and zoning – Zoning plays a critical role in dictating the types of businesses that can function out of a commercial building. Types of commercial zoning differ for:

        • Real estate
        • Leisure
        • Retail
        • Restaurant
        • Office space

      Because of this, only certain types of businesses may be allowed to operate out of your space legally. Therefore, if you do not already know your property’s zoning restrictions, it is critical that you understand those before attempting to fill the location.

      Size – A mom and pop shop is going to have different office space square footage requirements than a major company. For each vacant piece of property you own, you should have a solid idea of what size of business could ideally thrive with those square footage constraints.

      Accessibility – Does it have plenty of parking? Does it have street parking? A parking lot, or one nearby? Can the building be accessed from the street? Questions such as these are of critical importance to restaurants and retail stores. If it is a hassle for their customers to reach the store, they will have a tough time succeeding. So, if your property does have great access and parking, make sure to highlight that fact and target viable businesses.

      Budget – While you want to make money, every day that passes with the property remaining empty is money lost. When you set your rent prices, it is important that you are pricing them out according to the market set by comparable spaces. Even if your space is in an incredible location and has great accessibility, you could be driving away potential customers by overestimating what people are willing to pay. If you have to drop the price somewhat below the optimal figure, that may be more cost effective than having to eat a month’s worth of rent.

      By rigorously examining your spaces and figuring out what type of business would be best suited for that specific location, you can optimize your search and avoid wasting your time on businesses who are, in all likelihood, going to pass on the site in favor of one that better suits their needs.

      Ways to Find Tenants

      Once you have determined who your space is perfect for, it is time to start reaching out.

      Move-in Specials

      Everyone likes to feel like they are getting a deal even if they know that the savings are minimal. It is why Black Friday sales are so popular and why coupons are still commonly used. Many people are willing to pull the trigger on purchasing an item if it means that they are paying a little bit less or if it comes with a bundle of other things.  
      Consider throwing in incentives, upgrades, or deal sweeteners in order to entice the potential tenant to sign the lease.  Possible promotions include:

      • No security deposit
      • A security deposit discount
      • Free Wi-Fi for the first year
      • First month’s rent is free
      • Upgraded appliances
      • No application fee
      • Gift card to a restaurant or furniture store
      • A gift basket

      If you have the resources, even small gestures could go a long way in encouraging a potential renter to become an actual renter.

      Reward Referrals

      One of the easiest and most effective ways to fill out a space is to use your already existing clients and tenants for recommendations. If you have established a healthy working relationship with your tenants, they would likely already be willing to help connect you with a friend or collegial business without any reward. By incentivizing this referral, you motivate them to generate solid leads and actively work with you to fill that space. You could promise:

      • A free month’s rent
      • A lump sum of cash
      • A substantial gift certificate

      If you treat current tenants well and develop a strong rapport, a tremendous byproduct of this is that they will want to vouch for you and will be happy to reach out to close connections that are in need of a new space. Word of mouth is hugely important to most people. Think about how many times you have shared your favorite restaurant, movie, song, or whatever with someone close and then they acted upon your recommendation. Consider how many times you have responded to a friend’s endorsement.

      Commercial Parcel Lockers

      In a day and age where Amazon reigns king, most every business receives a variety of mail, packages, and delivery shipments. One possible incentive that you can use to entice businesses into renting your location is providing them with smart package lockers such as those offered by Parcel Pending. Smart-lockers help to eliminate package problems, prevent theft, ensure that packages have been delivered safely, and create efficiencies for the mail services team.
      Parcel Pending offers lockers that are:

      • Advanced – Owners can manage deliveries with the mobile app.
      • Convenient – Multi-sized lockers can hold packages of varying sizes.
      • Cool – Refrigerated lockers to keep temperature sensitive items at their ideal temp.
      • Courier Agnostic – Accept deliveries from any and all courier services
      • Customizable – A wide range of colors or custom wraps available.
      • Fast – Barcode scanner, allows for rapid package delivery
      • Secure – 24/7 cloud-based video surveillance capabilities.
      • Smart – Have infrared scanners meant to identify packages in each locker.

      Not only do tenants reference these types of amenities when evaluating a rental property, but as the property manager you also save money since implementing such a process will help to reduce overall operating costs.

      Improve Parking

      As mentioned previously, parking can be a deciding factor in a business’ final verdict. In metro areas especially, parking is often considered to be of larger import than the location itself. They cannot sell anything if customers can’t get in their doors. If your property has inadequate parking, they may decide to go with a worse space, but one that has guaranteed parking spots.
      If you have an empty property you are having difficulty renting, it may be worth it to try and enhance the space. If there is a possibility that you could open up parking spaces, repave, or improve the parking lot’s max capacity and flow, the ROI of hiring a paving company to make this additional space could be substantial over the property’s lifetime. Especially when you consider the impact parking can have on both customer and employee satisfaction.
      If you have no space to make more room for parking, another option would be to partner with a nearby parking lot or garage to see if you can negotiate discounted rates for tenants. You could also reach out to neighboring businesses that might have extra space to see if you can work out a deal.

      Secure your Property

      Similar to the smart lockers, businesses care whether or not a location is safe not only for their employees but their customers as well. Providing on-site security could be a fantastic motivation to pick your place over another one that is similarly ranked. This could include:

      • An on-site security staff at certain hours
      • Round the clock security services
      • Cameras installed on the property
      • A Ring security front door system

      While potential steps are not limited to those above, what matters is making potential tenants feel that their property, customers, and employees would be safe and secure in your location.

      Offer a Short-Term Lease

      Companies that are new to the commercial market may require limited space to start but could grow into something much larger as time passes. For smaller vacant spaces that are suitable for a small business, it may be worth considering offering the option of a short-term lease. New businesses that have yet to generate any income may feel uncomfortable making a long-term commitment to leasing space, especially when they don’t know if they’ll be able to keep the lights on six months later.  

      By offering a discounted short-term lease with the ability to extend after the end of the initial contract, you not only help a fledgling business out but also generate revenue on that space that might otherwise remain unoccupied. While you might be making less money in the immediate future, over the long haul as the business grows, you can increase rates or even help them transition into one of your larger locations.
      Even if they do not end up growing substantially, businesses rely on familiarity, foot-traffic, and word of mouth to succeed; they do not have the flexibility to pick up shop and just relocate. If the business manages to survive the first year, there is an excellent chance that they remain a tenant for many years after.

      Get Going

      If you have a vacant commercial property you are trying to rent out, there are various steps you can take to improve your odds of finding a great tenant. Remember to consider the space and what type of business it is best suited for. Once you have determined that, consider offering any of the following incentives:

      • Move-in specials
      • Referral rewards
      • Smart and secure parcel reception and storage
      • Maximized parking
      • Improved security
      • Short-term leases

      Work with a Property Management Company

      If all else fails, it may be worth reaching out to a property management company. While this may cost you some money up front, a property management company such as Servis Realty can help locate tenants who are perfect matches for the location. Property managers have brokers with access to databases and large customer pools who are actively looking for the right space for their business. They can take your space’s specifications and pair them with a location hunter with similar desires when it comes to budget, size, zoning, access, and location.

      Check out our website for more information on our services.

      www.servisrealty.ca

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