Best Practices to Retain Tenants in Commercial Real Estate
Getting tenants is just the beginning. The real struggle of this business is retaining tenants after their initial contract has expired. In commercial real estate, tenants make substantial investments in the spaces they rent. Therefore, it doesn’t make sense for them to change the landlord unless there are significant issues. Conversely, for a landlord, losing a tenant could affect their income for up to two years, as finding a replacement is not easy.
So, what should a diligent landlord do? At Douglas Commercial we have found that the following approaches yield the best results.
Be open and communicate clearly
Let your tenants know how they can reach you or your sub-contractors any time they have a problem. Always let them know about changes you intend to make, even if these are to their best advantage. Ask for their permission when installing new items or doing routine checks. Give notices well in advance if you have maintenance work scheduled and let them prepare.
Set yourself the goal to ask for feedback from your tenants at least quarterly to make sure you are on the same page and you are meeting their needs consistently.
Put in place systems and rewards
Streamline all processes and make sure you have a system for everything between you and your tenants. Help them automate rate payments and provide them with detailed invoices for utilities. You can even set a portal or internal dashboard where they can check at any point how much they owe you, and you can use to ensure they are not behind. Informed decision-making builds trust.
Offer rewards, either small discounts or other gifts to the best tenants. Jump in early into negotiating the next contract and give them an incentive to sign another year with you. Add a personal touch, for example, an anniversary gift and thank you note for working with you.
Think about the future
A study by Deloitte shows that smart buildings will have better chances to retain tenants. Most of them are looking for IoT powered amenities like HVAC, lighting, and parking, and security. Some eco-conscious tenants also care that the structure they choose runs on green energy. Others care more about privacy and having own leisure and eating options on premises. With the rise of the millennial workforce, companies care more to get spaces that promote well-being.
If you need more advice and help in setting up our systems to retain tenants, Douglas Commercial is just a phone call or a click away. Our experts can give you information on real-life strategies to make sure your tenants are delighted with your offer and even become your ambassadors.