Investing in commercial real estate and finding the right tenants for your space can be extremely time-consuming. Handling all those incoming phone calls, the tenant screening process, endless site tours… And that’s only the beginning of the process. Unlike the residential market, commercial real estate lacks a centralized listing authority such as the MLS or Zillow. While you can use some of these online services, they frequently load your listing with false information. In other words, you must pay to play if you want any attention at all. So, the question is: How do you find tenants for your commercial space? Even though the process itself seems challenging and complex, there are a few tricks in the book you could use. Well, four – to be exact. So, let’s see what you can do
Work with a commercial real estate brokerage
This is the simplest and most efficient method to find tenants for your commercial space. Commercial real estate brokerages specialize in the lease and sale of commercial property. This includes office, retail, and industrial space.
Since commercial real estate lacks a unified database, brokers are your number one source of information. They always have information about which companies are in the business of searching for a new space and which ones will be in the future. In addition, they stay in touch with company owners, property management organizations, and other brokers to stay up to date on what’s going on in their market.
Commercial real estate brokers have a legal obligation to you, so they act in your best interests. Their fee represents a % of the overall lease value. You won’t have to pay them until they deliver a wholly executed lease.
When it comes to the payment process, you may even schedule these payments so that you don’t pay the fee until you get the money. The most popular method is to pay half of the commission at lease execution after collecting the first month’s rent and security deposit and the other half at rent commencement. This won’t eliminate your out-of-pocket expenses, but it won’t be a huge financial stretch either.
The second option is to pay a percentage of the monthly collected rentals. Unfortunately, most brokers will increase their fees in this case because they are paid over a much more extended time.
Besides being your commercial attorney, your landlord rep broker will also be your professional consultant throughout the lease process. So, in addition to assisting you in finding a tenant for your commercial property, they can also help you write your letter of intent, coordinate any vendors you’ll require, and assist in lease negotiations. That way, you’re sure you’ll end up with the best possible deal.
Landlords that use brokers to lease their commercial space find better tenants and negotiate better terms.
List your commercial property on online platforms
If you’re planning to buy a property or preparing for a vacancy, you may not require the services of a broker to find a renter. Perhaps you’re in the early stages of putting up a proposal and want to know what market rates and conditions are.
Loopnet, Craigslist, and CREXi, for example, allow you to scratch the surface and become acquainted with the market so that you have a basic idea of what you’re dealing with.
Even though these platforms don’t have the best reach and there are numerous low-quality prospects, we still suggest that you give it a whirl. These platforms allow users to search by product type, so they can always look for retail or office only. In addition, some of these platforms even have an option to search by square footage, loading docks, access, ceiling heights, and other details. Therefore, your job is to put as much detail as possible when listing your property, and the right tenants will find you.
Another advantage of using these online platforms is that you may be able to discover a commercial real estate broker that specializes in the neighborhood or region where your property is located. They’re getting inquiries about other properties in the vicinity from renters who might not be a good fit for those buildings but could be good tenants for yours!
Send out direct mail or brochures
You may distribute pamphlets to local companies and renters by utilizing the postal service. Based on that procedure, you may purposefully quote existing vacancies and surrounding properties for future occupation. Discuss your current listings and the positions that are up for negotiation.
Even though this is an outdated way of marketing your property, sometimes the traditional path is the best one to follow. This is a great way to reach prospective tenants without wrestling false information on online platforms. Additionally, this is your chance to present your commercial property in the right light.
In addition, if you want to grab the attention of prospective buyers with these brochures, you could offer to help them with other steps related to them moving into your commercial space. For example, you can give them helpful info about local moving services that can help them with the relocation process. This is a great way to show these prospective tenants who you are as a person. Once they realize an actual human being is genuinely trying to connect and find suitable tenants for their property, the good tenants will start showing up!
Don’t forget to put up a sign
Believe it or not, actually putting up a sign can speed up the leasing process a lot. But not just any sign! You must be highly deliberate with the information on the sign to focus on your targeting here. So, don’t just pick up the first ‘For Lease’ sign you see at Home Depot and put your number below it. Those signs are hardly visible, modest, and don’t give off a professional vibe. And believe us when we say that tenants are often cautious about their landlord’s professionalism. Many of them have had horrible landlord experiences and don’t want to go through it again.
The signs we recommend you use should be approximately 4′ by 4′ in size. If you can’t fit one in a window, purchase a pallet stand and set it along the road in front. Additionally, feel free to provide information about the space on the sign, such as its size and type, or whatever else you think is relevant. However, keep in mind that you will not be able to reuse that sign for any other properties you decide to lease. This is the only downside to this.
Yes, commercial real estate is more challenging than residential real estate. However, if you’re determined to lease your property to a serious company, there are a few ways you can do so. As you can see, working with a commercial real estate brokerage is the most efficient way to find tenants for your commercial space. However, you shouldn’t neglect online platforms and traditional forms of marketing either. The important thing is to make yourself visible, and you’ll be seen. Even though you’ll have to wrestle with several low-quality prospects, you’ll find the right one eventually. So, good luck!