Best Practices for Commercial Tenant Retention

Your relationship with your tenants doesn't grind to a halt when the lease is signed, nor should it.

The onboarding of new tenants is the first step in an ongoing process that involves quality communication, an effort to address issues and the desire to keep your tenants on your property. Maintaining those relationships and renewals is crucial in the competitive CRE realm, and by following a few guidelines, you can create a strong partnership that benefits your tenants and your real estate venture.

Here are some best practices for tenant retention in commercial properties.

Why Commercial Tenant Retention is Important

The reasons why you want to retain quality tenants are numerous, with the most obvious of the bunch involving your turnover rates. When tenants stay, the need for constant advertising and the repeated screening of new tenants decreases, saving you time and money. You’ll also avoid needing to routinely pay for damages done to your property by less-trustworthy tenants.

Fewer tenants also mean less income flowing into your wallet. By filling vacancies, you avoid loss of money and instability that might come from economic dips. Tenant retention also helps you look good; a thriving property with quality, long-term residents can give you a leg up on the competition while also attracting more tenants to your community.

5 Commercial Tenant Retention Best Practices

Attract the Right Tenant

The first step in retaining tenants is finding tenants you actually want to retain. Attracting the ideal tenant begins with understanding the unique value of your property and what it can offer to prospective businesses. The clearer that understanding, the more equipped you’ll be to reach businesses that fit your property like a glove.

The ideal tenant will, in turn, deliver value to your property by generating revenue, providing stability and giving your CRE a good reputation. When properly nurtured, the relationship between tenant and landlord can mutually benefit both parties equally.

Maintain the Property

One of the core factors of property ownership is consistent upkeep, and this directly impacts your ability to retain and attract tenants. If your property is falling apart, your tenants won’t feel overly inspired to renew their leases.

Keep an eye on your property and address issues quickly and efficiently. Keep your tenants informed about any fixes or maintenance-related issues and establish a reliable method of communication that allows tenants to report issues directly to you and your team.

Keep an Open Line of Communication

As mentioned above, reliable communication works wonders for getting maintenance issues resolved. However, that effect stretches to plenty of other tenant-retention factors, including your reliability as a landlord, a tenant’s ability to deliver safety concerns, and the overall trust built between you and the businesses that call your property home.

Take the time (and money) to invest in tenant communication software or other methods of connectivity. Make sure those methods are clearly communicated to your tenants and that you’re keeping the line open to efficiently address any issues that might arise. The easier you are to communicate with, the more likely your tenants will feel empowered to stay with your property.

Offer New Amenities

A stagnant property will do little to retain tenants or attract new ones. By regularly updating your property with new amenities and enticing features, you ensure the continued patronage of your tenants.

Have your property inspected at regular intervals and listen to the recommendations of the inspectors. If they suggest adding new technology or improving certain aspects of your property, it might be wise to invest in those updates. You can also actively involve your tenants in these conversations by asking them how you can improve the property to benefit their needs.

Put an Emphasis on Sustainability

More and more commercial properties are putting an emphasis on sustainability and environmental friendliness, and that focus is becoming a “make-or-break” decision point for an increasing number of businesses. By embracing sustainability, you can attract quality tenants with a similar dedication to energy efficiency and respect for the environment as a whole.

Consider launching green initiatives within your property, such as a recycling program or an area for composting. Look into installing solar panels or LED lights and don’t be shy about demonstrating these factors to potential tenants.

Conclusion

There’s an art to attracting and retaining the ideal tenant. It requires a balance between marketing your property’s unique features, keeping that property maintained, listening to your tenants and making it easier for them to speak to you, offering as much value as you can, and offering new amenities to keep your property enticing. If you follow these guidelines, you’ll be well on your way to establishing a strong and long-lasting tenant/landlord relationship.

Looking for a partner to help you find the perfect commercial property? The experts at DRK will guide you, answer your questions and help you make the most of your real estate venture.

Scout commercial real estate available in the Columbus, Ohio, area here.

 

Until next time,

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