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Showing the commercial office property to a tenant is a special skill. If done correctly you can position yourself very effectively and professionally for a deal. After doing many of these inspections personally over the years and also seeing many agents take inspections through premises, I have developed this strategy to the process.
- From the moment you walk through the door start showing the features of the premises that you know or suspect are relevant to the tenant.
- Focus on the visual things firstly and particularly the appearance of the premises, the lighting, the fitout design and layout, and carpet.
- Use your fact sheets regards the tenancy to support your discussions on area and rental.
- As you converse, observe the tenants response and what seems to please or interest the tenant.
- The items or facts that please the tenant are likely to be factors that you can later use in the closing process.
- Show the placement and use of the common areas and facilities such as toilets and tea rooms or showers.
- Use any open space to indicate tenancy flexibility of design. Distances of 10m and above from the central core to the exterior walls are desirable from the tenancy design perspective. Architects prefer the greater distances for innovation or flexibility in layout (use this fact as a talking point).
- Help the tenant understand the access and entry points to the premises particularly if the premises are shared with a number of occupants.
- Use the windows on the exterior front walls as your reference to both views available and layout points for executive offices.
- Illustrate or indicate the floor to ceiling distances for the tenant to aid with potential fitout design configurations.
- Lift foyers and building entrance doorways are a reflection of the way in which the premises are maintained. Ensure that they reflect the correct professional and clean image before the inspection. Any poor presentation in the premises sends a message to the tenant about the landlord’s intentions and previous performance on the property.
- Directory boards should be modern, clean, and up to date as the prospective tenant is likely to look at the board to see what other occupants exist in the building.
- Have a floor plan from the building to use in your discussions to show distances from the service core.
- Have a spare copy to draw on and show indicative fitout configurations.
- Security of tenancy space and the floor of the tenancy should be talked about and illustrated to the tenant so that they know how they can protect their premises. This is even more important when multiple tenants occupy the premises
- Discuss air conditioning hours of operation and design or supply flexibility if your prospective tenant requires after hours operation.
- If possible show your prospective tenant another tenancy space in the same building that is well designed and utilised by that occupant.
- Take some measuring device with you to measure and important distances and run-off points for the potential new fitout.
When you reach the end of the inspection go through the points of concern and the points of understanding that the tenant has. This will show the tenant that you completely understand how you can help them with relative premises. One of the strategies in this process is to restate what you believe the tenant is looking for or concerned about.
At the end of the inspection make an appointment with the tenant to catch-up in the next 48 hours and go through matters from the inspection.
The inspection will give the tenant a number of things to think about. You must have a process of follow-up. In some cases you may also have questions that need to be answered about the premises that could not be addressed at the time of inspection.
After every inspection, make notes of the actual inspection including any results, perceptions, and questions. In a property that is creating great interest from a number of tenants these notes are the only way to keep control of information and the negotiations.
Any further information to be supplied to the tenant should be supplied in writing; this can be by email or fax. Most importantly you must keep records of the information supplied to each perspective tenant.
Regrettably some landlords will selectively tell you things about the premises, leaving out key information that is detrimental to occupancy. You almost have to be a ‘detective’ to explore all issues relating to the property. Make sure you record all conversations with the landlord in note form. This is your only protection if something of a negative nature arises later.
When the landlord has given you a specific piece of information or a specific instruction, ensure that you acknowledge that matter by an email or fax back to the landlord. Again this is a protection strategy. Clear and concise communication protects you when the going gets tough (and it does).
From the inspection of the premises and the appointment that you established at the end of the inspection, you should now have a further meeting where you can go through questions and answers. Do the following:
- Discuss the tour of the premises, highlighting the key issues that the tenant needs
- Go through any unanswered questions
- Again show plans and photos of the premises to support your discussions
- Explain availability of the premises again so that the tenant can see how any move of premises can be formulated.
- Offer to take any architects and engineers through the premises to aid the tenants fitout design considerations.
Now is the time to emphasise any incentives that may be available to the occupants if they go to lease quickly. You may then wish to put a formal ‘offer to lease’ document on the table to entice the discussion and potential closure. Take notes at and from the meeting with the tenant.
So there you have a well structured approach to the leasing inspection and meeting process. You should be able to add and change this process to suit your market and your style of negotiation.
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