It happens to all commercial real estate investors: at some point, your tenants will move out, and you’ll be forced to find a new commercial property tenant for the property.
You could choose to use a commercial leasing firm, but if you’re like some people, you prefer to find your IDEAL commercial property tenant on your own.
But is it really possible to find a great replacement tenant on your own? And will it take you forever to do it?
Actually, finding another does take work – but it’s not as difficult as it seems.
Here are 4 steps you can take to help you find the ideal tenant for your commercial real estate investment property.
STEP 1: IDENTIFY THE IDEAL BUSINESS FOR THE PROPERTY
With a bit of hustle you can find the perfect commercial property tenant for your commercial space. Start by examining your space carefully in order to identify the ideal business for the property and the location.
Once you’ve identified the ideal business, you have three choices:
- One, you can approach a smaller business with an offer to help them expand.
- Two, you can approach a business owner who has been working out of their home until now.
- Three, you can approach someone who is has not yet opened up their own business, but are considering it.
STEP 2: CONSIDER HOW TO MAKE IT WORTHWHILE TO LEASE YOUR PROPERTY
As in any business deal, you need to be able to convince prospective tenants as to why your property is THE BEST PLACE for their business.
There are numerous ways to do this that are a win for both you and your future commercial property tenant. For example, you could offer to give them a discount on their first year’s rent, or base rent on their gross receipts.
Some business owners, for example, might be able to make the rent but lack the initial startup costs of renting a commercial income property. You could offer to waive certain first-time fees, or give them a reduced rate for a specified start-up period.
STEP 3: APPROACH YOUR PROSPECTS
In today’s day and age it’s fairly simple to get a list of businesses you’d like to target. There are numerous business directories where for a fee you can get a list with the business name, address, contact person, and a phone number, or you can do a free search on the online yellow pages for your state, and that will also give you the information you need.
Once you have the information, you can send out a direct mail letter, phone, or stop in on person. Don’t rush in with your offer, though. Take some time to listen to them about their hopes and concerns, only pitching after you’ve heard them out.
STEP 4: DON’T WASTE YOUR TIME WITH WISHY-WASHY PROSPECTS
As a commercial income property owner you can expect to spend some time convincing prospective tenants about the SUITABILITY of your property.
However, don’t mistake selling your property for selling the idea of relocating. If you speak to a commercial property tenant who hasn’t even considered relocating, then you’ll waste valuable time trying to convince them it’s a good idea – and then you’ll still have to convince them that your property is the best one for their business. In the meantime, you’ll still be losing out on all or a portion of your profits while your commercial space sits empty.
Make your marketing more effective by quickly eliminating tenants who haven’t even considered moving. You can do this with a quick chat on the phone, or in person, but however you do it, make sure it’s one of the first things you start the conversation with.
You can find a great commercial property tenant on your own, as long as you’re willing to spend the time and effort to do it right.
Let me know in the comments how you’ve gone about finding new tenants, and how long it took you.
