Tenant turnover is expensive. On average, it costs around three months’ rent—and that’s on top of vacancy-induced rent loss. Each time a tenant leaves a property, it must be thoroughly cleaned and returned to pristine cosmetic condition. Then there are administrative costs, advertising costs, and costs associated with showing the space. To mitigate these expenses, the obvious answer is tenant retention, but not just any tenant. Most commercial property management companies have experienced at least one bad apple, the tenant who is consistently late on rent (or doesn’t pay it at all), damages property, and violates property rules. All the more reason to make your property one that attracts—and keeps—conscientious tenants. Looking to the experts, we’ve gleaned 11 tips on how to do this. And most of these tips are just as important for in-house facilities managers looking to keep their internal customers happy.
- Occupant Comfort.
Whether in a workspace or a living space, people want to be comfortable—first and foremost. This includes a moderate temperature, visually appealing lighting, good acoustics, excellent air quality, and cleanliness. A well-maintained HVAC system, coupled with preventative maintenance protocols, goes a long way toward ensuring temperature control and air quality. Sufficient light of a comfortable color, ample insulation, and well-trained cleaning staff are also key, as are reasonable rules for tenant use (quiet periods, storage and disposal provisions, parking protocols, etc.). Not only can these measures keep tenants physically comfortable, studies show a clean, comfortable workspace boosts mental health.
- The Right Staff.
Tenants regularly cite the professionalism and personableness of maintenance and custodial staff. Conversely, they are quick to note when these are lacking. All the more reason to attract and retain staff that’s not only knowledgeable but also friendly and professional in all interactions.
Whether to request a work order or submit a rent payment, quality tenants expect commercial property management professionals to be digitally accessible with a quick (if not instant) response time. They’ll also want you to be available through a variety of channels, including social media, email, phone, and website. Also, be sure to alert tenants, well ahead of time, when maintenance may disrupt a building’s normal activities, and be prepared to answer any questions they may have about the disruption. Blessing and/or curse, constant availability is part of doing business as a commercial property manager today.
The pandemic changed the nature of building usage as well as tenant expectations around flexibility. Nowadays, with hybrid schedules and a rapidly changing business world, tenants want to negotiate terms when it comes to lease duration, evolving space requirements, termination options, enhanced cleanliness protocols, and even furniture rearrangement.
Convenient as a digitally connected world is, genuine human-to-human relating can’t be underestimated. Small gestures—knowing tenants by name, being aware of their likes/dislikes, and reaching out at holidays—can make them more likely to view your interactions as relational, as opposed to solely transactional. Likewise, a community newsletter cultivates a sense of communal inclusion. In these contexts, tenants will be more inclined to work collaboratively with you and their fellow tenants.
- Proactive Leasing.
Don’t assume your tenants will remember when it’s time to renew a lease. Reach out to them in advance and use technology to make renewal as easy as the click of a button. Moreover, given the cost of turnover, it may be worth it to offer lease-signing incentives like a month of reduced rent—and well before lease renewal dates.
- Preventative Maintenance.
Quick maintenance response times are imperative, but preventing a problem before it occurs? That’s golden—and not just for tenants. By addressing issues before they become irreparable, preventative maintenance ultimately cuts commercial property management costs.
- Fair Rules and Enforcement.
Because commercial buildings are often communal, the rules therein should be about maintaining a safe, comfortable space for everyone. Allowing a mediocre tenant to blare music in their office may result in a quality tenant’s departure. Establish, upfront, what the rules are and why they are in place. Then, fairly and consistently enforce them.
- Move-In and Out Inspections.
Legally mandated in some states, move-in and move-out inspections are a best practice whatever your facility’s zip code. Put simply, they hold everyone accountable—tenants, landlords, and property managers—in a straightforward way.
- Get Feedback.
Surveys make it easy to find out what’s working, and, more importantly, not working for your tenants. But it’s not enough to gain their insights. Of equal importance is acting on them. If a particular issue is cited by several tenants, it needs to be addressed promptly and thoroughly. If similar amenities are requested by many tenants, it may be worth it to provide them.
- Be Mindful of Competition.
What are your competitors’ leasing rates? The condition of their buildings? Extra perks for tenants? What amenities do they have that you don’t or vice versa? Commercial property management is more competitive than ever, so it pays to be aware.