Commercial Agents – How to Deal With Difficult Landlord Clients

When you work in a commercial or retail real estate agency, it is easy to get frustrated with demanding landlords and difficult property situations. When the property market is under pressure, landlords are seeking greater assistance from the agents that they use (that’s us). Frustration and pressure will arise in many an agency and landlord relationship as the property market goes through change.

Comprehensive Service

In a tough property market, the commercial real estate agents that comprehensively service all property needs are those that are in demand. A well leased and managed property will eventually be sold. Every stage of the client relationship today requires special skills in the agency across leasing, sales, and property management.

Understanding the factors of change in the property market today and how to adjust for them is critical to helping clients with property pressures. The reality of the current property market is that control, strategy, results, and information are really the main factors that the landlord is looking for in moving ahead. The fact is they need our help. We are the best providers of strategic solutions when it comes to property occupancy, returns on investment, and disposal strategies.

Here are some further strategies to use with landlords in this tougher property market.

  1. Keep them up to date with property and lease issues with all tenants in the tenancy mix and the adjacent properties. Work well in advance when it comes to lease documentation and critical dates. Every lease in the subject property should be reviewed for future events and pressures on cash flow.
  2. Market information will change from time to time. Competing properties will also put some pressure on surrounding property sales and property leases. Keeping clients and landlords briefed on the pressures of the competition properties is quite important.
  3. Lease negotiations will occur with sitting tenants and new tenants from time to time. Importantly the negotiation should occur with due regard to the prevailing market conditions. That will include terms of rental, terms of lease, and incentives. The landlord can be positioned for a competitive lease transaction when all elements of the property market are clearly assessed and provided.
  4. The quality of tenants within the tenancy mix, and the threats of vacancy are two highly important issues to be managed and optimized. Both will have impact on the property income profile and tenancy mix. What threats emanate from the property tenant mix now?
  5. Stay in touch with all tenants within the tenancy mix on a regular basis. They are likely to need lease adjustments or changes of occupancy from time to time. If they are good tenants and considered worthwhile for the future of the property, then negotiations should be open and encouraged. It is better to have a stable occupancy than the volatility of increasing vacancies.
  6. Good lease management processes can be incorporated into a business plan for the property. Each year the property can be reviewed in a number of ways with the results being incorporated into the business plan. The plan would include lease reviews, tenancy mix, income profiles, expenditure budgets, and renovation strategies.

Difficult landlords are really just looking for further help and specialized assistance. It is quite likely that they and their property are under some pressures. Improve your services as a specialized commercial agent so that you can help these landlords achieve better levels of property performance in difficult times.

How Technology Stole the Show at Fashion Week

As fashion week participants create shows that are increasingly geared towards consumers, all sorts of technology is being used to make sure the designers and their creations reach as broad an audience as possible. While in the past the fashion shows were more of an insider affair, now many design houses are trying to reach out to a broader demographic and, of course, trying to boost sales. More and more, clothes are being offered for sale there and then, with some fashion houses offering a full brand range in a see-now, buy-now capacity – everything from the make-up to the accessories to the shoes. Technology now plays a huge role in all our lives and nowhere is this more evident than at the fashion weeks, where technology really stole the show, in some ways at least.

See-Now, Buy-Now

While most of the see-now, buy-now options were offered through each house’s existing e-commerce site and their physical stores, while Temperly London paired up with social app Vero to allow consumers to buy three of their fashion week looks right now.

Snapchat and Instagram Stories

While which of these will win their ‘format war’ remains to be seen, both were used fairly extensively at Fashion weeks. Misha Nonoo used Snapchat to slowly unveil her collection, while J Mendel documented his entire collection with Instagram Stories. Industry experts seem to think that Instagram Stories is the perfect medium for sharing fashion week with the fans.

Chatbots Taking Over

Shopability was a big thing this season and both Burberry and Tommy Hilfiger introduced AI run chatbots as a new user interface. With chatbots taking over our fashion shopping experiences, we better hope that they do not develop artificial intelligence that becomes smarter than we are!

Virtual, Mixed and Augmented Reality

Even the excitement of the shows themselves was not enough, it seems. Many shows had an element of alternative reality to them. For example, in New York fashion week, Intel worked with several designers to broadcast their shows in virtual reality, powered by Voke’s GearVR app, so viewers could feel as though they were right on the front row. Rebecca Minkoff worked with augmented reality, working with shopping app Zeekit to allow customers to upload a picture of themselves and see what they would look like in their favourite outfit from the show. Meanwhile, real innovation came in the form of mixed reality space, where an audience could wear Microsoft Hololens headsets to see an extra layer over reality. Soon, perhaps people all over the world could be watching a fashion show in their own living room and feel as though they are really right there.

One thing is certain, technological change is swift and fashion is not going to want to be left behind.

Commercial Agents – Rental and Leasing Strategies for Commercial or Retail Property Today

When it comes to renting and leasing commercial property today, the ultimate target should be to establish a stable and professionally prepared lease that encourages cash flow on the property over future years. Every landlord will have a different focus points and ideas relating to their investment. It is important that the lease matches the intentions of the landlord. The commercial agent needs to understand what the landlord wants to do and how the plan should work.

So when you find a tenant today, it is critical to know the lease terms and conditions that will be presented to the tenant. Hopefully you will have advised the landlord at an earlier stage so that the critical decisions here are well understood and have been set.

The different types of rental strategies to consider in commercial property include the following:

  1. The outgoings for the property should be identified and quantified. It is possible that the landlord will want to recover some of those outgoings from the tenants within the premises. This matter becomes more complex when it comes to multiple tenant occupancy in large premises such as shopping centres.
  2. The property type will have set trends and averages in the local area when it comes to lease procedures and rental levels. Ensure that you understand the factors here so that any advice that you give to the property owner will be accurate and correct as it relates to the property market at the moment. Market rentals change frequently, so speak to a number of other property agents and property valuers who can advise you of the recent benchmarks and new property deals locally.
  3. There is a significant difference between gross and net rental. The main difference is the recovery of outgoings and how it will occur. When it comes to a gross rental, the tenant is only paying one amount of money so the landlord has to gross up the rental to include the outgoings component that they would have normally recovered in a net rent situation. When it comes to net rental, the landlord will set a base rental above which the tenant will contribute towards particular outgoings relating to the tenancy and or the property. Clearly some decisions need to be made here before a tenant is located.
  4. When a lease is under negotiation, the factors of lease option come into discussion in cases where the tenant wants to remain in occupancy for an extended period of time after the first lease term. Options are useful property investment strategies although they do have limitations and frustrations from a landlord point of view. One option may be acceptable to the landlord after the initial term, but numerous options of three or four years for multiple renewals are to be discouraged. Multiple options remove the control of the property from the landlord and this can be a negative factor at the time of renovation or relocation. Options of this type also impact the property at time of sale.
  5. The rent reviews to be set for the growth of rental over the lease term should be discussed with the landlord prior to the location of the tenant. It is preferable for the landlord to set their own rules regards rent review processes rather than let the tenant dictate lower levels of rental escalation.

The rental strategies in commercial property are complex and critical to the future of the property. Take time to carefully consider the rental strategies with your client the landlord, prior to undertaking any special marketing campaign relating to leasing and tenant location.