The importance of communicating with your commercial income property tenants goes beyond “being nice.”
It actually makes good financial sense.
Good communication is the key to any successful relationship – whether it’s a marriage, a company partnership – or with a tenant. In fact, research shows that tenants who feel as if they have an open-line of communication are more likely to RENEW a lease.
And since it can take up to a year and a half to recoup the cost of finding a new tenant, it just makes sense that making sure you have a system that makes it easy to ensure regular communication with your CRE tenants.
It’s about more than end-of-the-year parties
Once upon a time it was enough to shake hands with your tenants every once in a while, and to get everyone together once a year for a holiday party.
That method simply doesn’t work anymore.
How To Woo Your CRE Tenants?
Commercial investment property tenants (CRE tenants) are not only more sophisticated, but today’s economy means that they are more determined than ever to find the best possible deal for their business. In order to woo your CRE tenant, you’ll need to go up a level, by making sure your property is able to meet your tenant’s business needs, and offering to “upgrade” your tenant’s facilities, if necessary.
Seem like too much of a financial burden?
Commercial income property owners who balk at the cost of renovations would do well to do look at the cost of replacing a tenant: for an tenant occupying a moderately-sized space of 10,000 square feet, the total cost of finding a new tenant adds up to $1.5 million – $1 million more than it would cost to simply renew a present tenant.
Get to know the decision makers
Understanding your CRE tenants starts from the top down. That means that in order to know what needs and concerns your tenants have, you need to understand their business as well. Walking around the area and observing isn’t enough; you’ll need to spend some time investigating their industry in general, and their business in particular.
Ask yourself these questions about your tenants’ businesses:
- How do they use their space? In other words, do they use most of their space for face to face customer interactions? Do they use a significant amount of space on the back-end for customer fulfillment?
- What kind of technical needs do they have? Do the infrastructure exist, or is it outdated, for their needs?
- Are they likely to expand?
Next, schedule a face-to-face meeting with a decision maker from each business. Explain that you’d like to get to know their businesses better, in order to find out what ways you can help their businesses succeed.
During the meeting, do more than take note of their concerns. When a CRE tenant expresses a concern or frustration about a particular problem, ask them what they see would be a satisfactory solution to the problem.
There’s no need to promise anything; however, keep in mind that listening doesn’t imply agreement – however the mere fact of being heard will have a powerful impact on your tenants.
Assign a person to serve as a contact liaison
In order to ensure that regular contact is made between real estate income property tenants and your management, make sure that someone on your property management team is responsible for a group of tenants. Their job would include:
- Calling CRE tenants monthly just to touch base
- Distributing and collecting a tenant satisfaction survey at key points: when a tenant moves in, yearly, before renewal, and once a tenant exits a property.
- The information on these surveys will give you valuable insight not only on what needs to be improved, but also on what you can do to attract new tenants.
Use social media
Social media is an effective method for informing your CRE tenants and their employees about the status of maintenance tasks, building updates, and for making available documents such as building plans, or “how to” documents or videos.
Consider creating a Facebook page or group, or at the very least, a Twitter account- so the liaison can quickly and easily keep their tenant group informed.
Planning and establishing an effective communication system doesn’t have to take a lot of time or cost a great deal of money. By working together with your tenants, you’ll not only save money, but you will build a community of people who are committed to the success of your property.
At Westwood Net Lease Advisors, we maintain a nationwide database of all types of commercial income properties” from warehouses, to retail properties, and more.