|Tenants can tie you up in knots|
When a new tenant is introduced to a commercial or retail property, it is important that the entire process is well managed and professionally staged. It is advisable that the property manager gets closely involved with the new tenant for at least the first four weeks of occupancy. So here are some tips from our bulletin this week.
A lease between a landlord and tenant goes for a number of years, and on that basis should be correctly established through professional property management processes. Good relationships between the landlord, the property manager, and the tenant set the scene for a successful lease cash flow within the property.
Consider some of the following issues as part of that lease establishment process:
- The tenant needs to understand the property layout, design and operation. That will involve some form of property briefing prior to occupation. It is the job of the property manager or landlord to integrate the new tenant into the new premises. Understanding that a new lease is actually a new business relationship, a few extra hours spent in this process will greatly benefit the relationship between all parties.
- The tenant should not be given the keys to the premises until the appropriate lease documentation has been correctly signed and completely satisfied. As part of that process there will be the necessary payments of rental, deposits, lease guarantees, and the provision of any other associated documentation. Many a property manager or landlord has mistakenly or innocently passed over the keys to a tenant prior to these issues being satisfied. All good intentions between the parties can lead to a future disagreement, delay, and poor communication. When tenants get their hands on the keys, their motivation to complete any outstanding matters falls away very fast. Key retention is a very powerful tool in a lease negotiation and tenant occupancy. Hold on to the keys until all lease issues are implemented and satisfied.
- The tenant needs to be briefed regards access to the premises, the operation of the property, and the people that they can contact when they need information. The first few weeks of occupancy are always the most confusing and disruptive. If the tenant is entering a property where there are many other tenants, it is important that the property manager stays close to the new tenant to minimising any confusion or disruption across the tenancy mix. This is a very relative issue when it comes to retail property.
- In the early stages of occupancy, the tenant will have some requests regards maintenance, security, property access, services, and amenities. Given the advances and availability of technology, the tenant should be given some simple method of communication to the right people and e-mail addresses for general matters verses emergency matters.
- When it comes to a totally new tenancy in a new building, there are likely to be other issues of fitout construction and design. This also has added layer of complexity to the interaction between landlord, property manager, and tenant. The fit out design and approval processes should be carefully controlled; that is the job of the property manager working with the landlord in overseeing the requirements of the tenant with their fit out.
It is notable that many commercial and retail property managers in the industry are overloaded with far too many properties and tenants. This problem generally comes about for two distinct reasons. Firstly the fee charged for managing the property is too low and therefore the property manager has to manage more properties. Secondly the office principal fails to recognize the complexity of the work required in commercial and retail property management.
There is a lot more work involved in the management of commercial and retail property. When it comes to the negotiation and establishment of the new property management listing, work load factors and reasonable fees need to be carefully considered.
An overworked or overloaded property manager will soon destroy the performance of an existing property portfolio. Exercise care in the selection of the right person and or the distribution of workload.
You can get more free tips for commercial and retail property managers at our website.