How to get commercial space rented?

Question

Bill Gulley · Answer

I sure wouldn't suggest a year of free rent for any term of lease unless the company/person was strong to sue and get the award for the remaining term.

What is it zoned for?

In commercial, all is fair just as in war. If you want an insurance agent, contact agents about your office space, get competitive. Make them an offer! If they have a buyout on a lease, compensate them by twice as much to make it worth moving.

You need to get active to either find a tenant or make one. Finding means contact the types of business operators you want, mail a letter, follow up with a call, walk in and see them, tell them you'd like to have them and make them an offer.

Making a tenant, two ways. 1st what operation needs to be in there? Then examine the market for that business, if it's a good location now go to those . businesses and talk about expanding their business in your area. The biggest roadblock for a small business expansion is the leasing of the new space and build up in a new area to cover expenses. You have control over that, make it easy for them to expand, lower rents in a start up period and perhaps devise rents from gross receipts so the business owner has much less risk in expanding.

The other way is build the business to go in there. Hundreds of ways to do this but what you're doing is identifying the right business, then find operators in that industry that 1. as above will expand but need a partner, 2. people in that business wanting to start their own. Lots of small businesses out there working out of a home or garage. Partner with them, bring them in the store front. This approach takes longer and requires more effort on your part, but you're building a business in your space, partnering with them and gradually move out as a partner into landlording. Or, man, you can end up with another business venture!

If you have a restaurant space, it's not hard to find a good cook, some long term assistant manager at another place and to steal some waitresses. Inventory and fixtures can come from you, investors and from financing....all this takes some knowledge and guts as most mom-pop types fail in 4 years, but if you're the landlord it makes getting over the hump much easier.....but this may not be for you, but I've done this and got out with more than rents

Just saying, instead of putting an ad in the paper and hanging a sign, get active in seeking out the tenants you want. :).  .

Mark Rowan · Answer

Thanks for the replies. Looks like I just have to get creative and get someone in there.  I like the storage unit idea.  There is also a full basement that I thought might be good for the storage for tenants, and maybe others in town that need to store some things.  Thanks again.

Marcia Maynard · Answer

My disclaimer... I do not own or manage commercial property.

My first thought is to rent the commercial space to a tenant who adds value to the neighborhood and thereby adds value to my residential units.

My second thought is, as an investor in residential units I am always in need of extra storage space for the tools and supplies I use in operations, so I would use part of the commercial space for my own storage needs.  I might convert some some of the space into storage units or lockers that I could rent to my 16 residential tenants.  Residential tenants always seem to have extra stuff!

Joel Owens · Answer

Well you can go at this yourself and spend a lot of time or use a commercial leasing firm.

I do not do any of that stuff as I am transactional for commercial buyers and sellers only.

Is this location rural, suburban, urban??

If rural the big guys usually are not there just local all in one type brokerages. In suburban to urban usually the big commercial leasing firms have a presence in the area.

You mentioned office space but retail might go on the ground floor. You might want to call up and interview two to three commercial leasing firms in the area. They can give you reports on per sq ft ,concessions tenants expect with average lease terms, etc.

Even if you do not use them you can gain a ton of free insight. There is a lot of work in the beginning to qualifying a tenant and getting them going on the commercial side.

Costar has a special tenant service that is expensive that commercial leasing firms use. It tracks what companies are leasing where and when there leases are coming up for renewal. Firms target these tenants and build a network for when they move or for future expansion locations. You can also look at local application filings with your county or city for new business start ups.

Hope it helps.

Franklin Romine · Answer

Offer a better product than your competitors at a better price, send your listing to other brokers and post on craigslist.  I would have a attractive lease rate for the first year and escalate years 2 and 3 to be at market rate.

How to get commercial space rented?

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