“3 Things to Know About Your Office for Lease”
Looking to improve the way you manage your office for lease?
Without a doubt, investing in a commercial real estate business is the smart move when considering the volatility of the current stock market. However, when a good portion of entrepreneurs is entertaining the same line of thought, competition can be high.
Although there is great demand for office for lease, supply can be even greater.
To ensure you remain competitive in this space, you need to set your office space apart or above other office space in your area. This doesn’t just mean making physical changes and renovations to the property. Attracting potential quality tenants can be done in other ways as well.
In this article, I’ll talk about the 3 things you need to know about your office for lease to help you improve cash flow and attract the right tenants.
3 Points to Understand for Your Office for Lease
Effective property management is the main key to make your office for lease successful. Property Management is not only running the operations of present buildings effectively, it includes coming up with ways to promote the buildings for lease and making them the best accommodatable locations for the businesses looking to lease the property. When building your commercial property business it is important to address crucial aspects of a rental property that potential tenants put emphasis on to grab their attention.
But how exactly can you do this to help separate your properties from the rest on the market? To make the process easier for you, let’s talk about the 3 main points to understand for making your office for lease properties the best on the market for potential business clients.
1. Calculate the Best Rent Rate
Giving the best possible rent rate is one of the effective ways to get the attention of potential tenants. Understanding and evaluating your competitor’s buildings and properties in the area will allow you to easily set your rental office space rates effectively. Begin with checking rental rates for comparable buildings in the area. From there evaluate the types of leases given to businesses in the area to find the best leases to offer for new businesses looking to relocate to your buildings. This process will help you determine how much you would charge your tenant’s rent and determine the best leases to offer new tenants.
However, during this process, you should always remember that commercial and retail leases use various rental pricing methods. The type of tenant’s business, economy, or tenant’s financial capabilities are the basis of determining the best rent rate for new tenants.
Rent Per Square Foot
Most commercial properties determine the amount of rent by the overall size of the rented space. The location of your building, amenities offered to tenants, and general style and appeal of the buildings will determine the rent per square foot. Knowing your building against your competitors in the area will help you to determine the sq/ft price based on the commercial value of the area.
The basis of rental rates of a commercial property depends on the economy of its location. Many property managers charge tenants with the amount they only need to run, operate, and make a small profit for their businesses.
Some property managers chose a percentage lease which requires their tenants to pay a percentage of their retail gross income in addition to the base rate. If the tenants’ businesses looking to rent your commercial properties are mainly retail then you may determine this is the best lease to offer your new tenants. Here’s how you can add the retail sales of your tenants to their base rent:
- Minimum base rent + percentage over a certain base amount.
- Minimum base rent + percentage of all gross receipts.
2. Ways of Advertising Your Office for Lease
Having the best rental rates will do nothing if you’re not advertising your property effectively. You need to spread the news about your property to attract potential tenants. There are multiple ways to advertise your office for lease.
Most businesses are using the internet to advertise and showcase their office space for lease as it’s a faster, cheaper and more effective method of reaching consumers. With many commercial tenants conducting their search on the Internet, it is important to be present in the digital landscape.
Social media and Google Ads are the most commonly used instruments by property managers to reach potential tenants. However, there are also various websites, such as Craigslist, LoopNet, Realtors.com and other like websites that you can post that an advertisement for your office for lease on to move things along.
Even if the internet is the preferred option, there are still people who prefer to look for vacancies in local newspapers.
Putting an advertisement in a local newspaper isn’t that expensive. While the newspaper limits the exposure of your ads, it will attract local people that are looking to rent an office immediately. Most newspapers have an online presence, for a small increase in advertisement rates, you can have your listings posted on the papers website as well as the local print media.
You can also ask a fellow realtor or property manager to include your office for lease in their listings. Most companies will do this for a fee or a percentage commission if they help you find a new tenant for the property they list for you. You should always consider doing this if you’re going to use the local newspapers to advertise. But expect the realtor charge you for the favor.
3. Why Tenants Should Consider an Office for Lease
When a business is starting or expanding most of the company’s resources are put towards that expansion of the business. A capital purchase of a building to locate their business in would make it much harder for a growing business to expand and remain profitable if they choose to buy a property. Purchasing a property over renting an office space, takes away a large portion of the capital the business would be able to use for expanding their business profitability. Additionally, when you’re renting a new property or location you can negotiate in the lease the capability of expanding the space immediately to fit the businesses needs. Renting over purchasing saves a huge investment of capital on their part. Renting an office for lease would not heavily affect the tenant’s working capital and their ability to expand their business.
Aside from that, leasing allows the tenant to simply focus on their business whilst a property manager runs the place. Maintaining the property becomes the least of their worries, as this is the key responsibility of the property manager.
Final Thoughts about 3 Things to Know About Your Office for Lease
In this blog post, we talked about 3 things to help you manage your office for lease properly and make it attractive to potential tenants.
One of the things is to set the right amount of rent. This can be based on the value of square foot in your area or in your tenant’s income. Remember, it is also important to keep your rates competitive and at par with other buildings in your area to not drive the tenants away.
The way you advertise your office for lease also makes a difference. You just need to choose the option that allows you to easily reach your preferred tenants.
Finally, tenants are more likely to choose to lease a property than to buy. Purchasing a property has advantages but it’s not always the best option for most business. Buying a property takes away the capability of expanding the space immediately and requires a huge investment.
An office for lease also gives tenants more time to focus on their business. Unlike purchasing a property, the property manager will handle the maintenance and utilities of the office for lease.
If you have questions regarding office for lease, leave them in the comments section below.
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