If you want evidence of how eager we are to improve our lives, it’s as close as a Google search for the phrase, “how to optimize.” That search returns more than 50 million results. There are seemingly endless options for optimizing our health, computer, and website. But for owners and managers of commercial property, there are some techniques and tips that might be even more important (gasp!) than regularly rebooting your computer. We’re talking about optimizing how you manage tenants and lease agreements.
One of the fundamental truths of business is that it’s easier and cheaper to keep an existing customer than to win a new one. And the same goes for tenants. Maintaining full occupancy is a prime way to optimize your commercial project. It’s nearly always more economical, more convenient, and less stressful to keep an existing tenant than it is to find someone new to occupy a unit.
That’s why it’s essential to stay up on top of all the dates and critical clauses buried deep inside your leases, so you don’t slip up and accidentally lose a tenant. The ball may be in tenant’s court when it comes to notifying you about their intent to renew, but that doesn’t mean you can’t nudge them if renewal time is coming up.
The business owners who occupy space in commercial buildings are often mom-and-pops who spend all day every day in the trenches. They are deep in the muck and might not realize that four-and-a-half years have gone by since they signed their lease.
Want to know a secret?
Chances are most tenants haven’t looked at the lease since the day they dropped that countersigned copy into a drawer or box. They aren’t even sure where it is.
But if they pay every month, don’t make waves, and keep the place clean, then you might want to take the extra step and touch base with them about the renewal.
On the other hand, you might have your fingers crossed that some less desirable tenants miss their renewal date. If a tenant goes month-to-month, you’ll have the opportunity to find a higher-paying tenant, a business that is cleaner, or as one building owner said, “Someone who won’t wreck the place.”
That owner has plenty of stories about tenants who didn’t break his heart when they decided to pack up and move on down the road. Here are a couple examples:
Sometimes the upside isn’t worth the downside, and you need to move on.
When leases are about to expire or due for renewal, make sure you know in advance so you can take action one way or another. If it’s someone you want to keep in your building, then reach out and let them know the time is approaching. And if you are losing a tenant – whether it’s their choice or yours – it’s always good to know far in advance so you can alert your broker and start marketing the space.
The final piece of advice from someone who has been down this road many times is to always part on good terms. It’s not unusual for a tenant to return months or years later.
If you’re looking to optimize your commercial property, then you want to fill your suites with great tenants that are worth holding onto. And once you get them – don’t let them go. A lease management system such as Leasecake is the best way to stay on top of important lease events and maintain open communication with tenants. To watch the demo and start using Leasecake for free, please click here now.
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