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The overhead costs of maintaining a commercial property can eat up a sizable chunk of the profits. One way to control costs is by cutting back on services such as plant care, mobile paper shredding, and seasonal decor. Another cost cutting strategy is to handle more of the maintenance or management work ourselves instead of hiring others to do the work.
But is it feasible to act as your own commercial leasing agent to save money? Probably not. As owners of a downtown retail building, our family has discovered that do-it-yourself leasing usually means that your property could sit vacant for a year or even more.
A commercial leasing agent knows the current market rates.
Setting a commercial lease rate isn't done by comparing your property to a similar one a few blocks over. Variables such as location, amenities, traffic, frontage, allowable improvements, available signage, parking slots, and even the age of the building all factor into determining a reasonable rent. Since commercial property owners don't have access to this information, it's almost impossible for us to come up with a comparable leasing price. By not knowing what other properties are renting for and the services they provide, we run the risk of scaring off possible tenants by charging too high of a rate.
A commercial leasing agent however is "tuned in" to the market and knows exactly how much the rent to charge for the space. Setting the right price means that the property will rent faster instead of setting vacant.
Networked into a wider pool of applicants.
When a business owner decides to relocate or upgrade to a larger retail or office space, he usually calls a leasing agent to find a suitable space instead of searching through town in search of "Office to Let" signs. He knows that the agent will have a wide selection of properties to choose which will save him time and effort.
Our family discovered that relying on a sign to market a commercial property limits the pool of applicants to businessmen who have shops in the immediate area. Working with a leasing agent means that your property is being advertised to a much broader selection of potential tenants. A larger pool of potential tenants results in a property being rented faster as well.
Familiarity with lease provisions.
If a prospective tenant asked for $55,000 in tenant improvements and a 10-year lease, would you reject his offer? Our family almost did, thinking that this sum was completely unreasonable. Were we ever wrong! Leasing agents know what sort of conditions and tenant improvements are expected for a commercial property, and will let you know when a prospective tenant is being reasonable or not in his demands. A leasing agent can also advise you as the best way to stage your property, what services should be provided, and what sort of enticements should be offered to draw in a new tenant.
When it comes to saving money, there are many tasks that a commercial property owner can easily do on his own. From our own experience, finding a commercial tenant and negotiating a lease is a task that's always best left to a professional leasing agent.
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