Landlords need to shape up and get prepared for the race to sell square feet of commercial real estate. Businesses will be raring to get back to work. Asking their employees to return to the office space and light the afterburners on the economic recovery. Finding new offices will be easier for tenants as the negative absorption rate increases. Landlords that want to continue renting office space in the current climate, should consider implementing any of the following, including renegotiation rent prices.
Safety, safety, safety
We’re not dealing with something trivial. We're in the tail end of a pandemic that has killed hundreds of thousands of people around the world. If you want tenants and professionals to view your office space without dread, employ basic safety measures and give them an office tour. Include hand sanitizer bottles in every room and make temporary social distancing markings on the floor. Put up basic hygiene and or COVID-19 health advice signs.
Hiring a bio-health expert to take an office tour and inspect your office, giving it the all-clear would increase confidence. You would be one step ahead of your competitors by putting potential tenants at ease. Tenants finding new offices want to know from commercial office portfolio giants that there's no risk of a second wave in their work environment. Brookfield, Boston properties and JBG Smith are the go to commercial real estates companies.
Lower your price
The aftershocks of the pandemic are going to be felt the hardest by commercial real estate who are renting office space. With the advent of mass remote working, you need to lower your square feet price to match expectations and needs. You should also be willing to renegotiation rent prices.
Make a virtual tour
Many clients finding new offices won’t want to come to view the property firsthand. They want to make sure that your office space is worth their time. If you haven’t already, hire a professional commercial property film company to make a virtual office tour.
A negotiable stance
State that you are willing to enter into office lease negotiations. When renting office space don’t just consider rates, think about the terms that you will offer. Consider offering a flexible plan in which you renegotiate rent prices and won’t increase the price for a set amount of time. This will help businesses that are trying to hire and regrow their employee numbers.
Offer a review slot
Some tenants will want their counsel to take a review of the office space. They want to assess the risks themselves. This could be square feet cost-wise, their right to redesign the office or the utility costs. Additionally, common area maintenance costs, performance and adaptability of the infrastructure, etc.
An exit strategy
Let's face it, some businesses barely keep their heads above water. Offering tenants a flexible exit strategy with lower fees and an easy route out of long-term obligations is something to consider. There are a lot of acquisitions and mergers going on as businesses hold onto each other to remain active. It's better to allow another thriving business to take over your lease than to keep a client that won’t be able to afford you. Any ongoing office lease negotiations should be part of this strategy.
Compare and contrast
Use your commercial real estate area to assess how attractive you really are. You can use leverage to raise the lease price if there isn’t any other fish in town that can match what you offer. By that same token, don’t push your luck with a tenantwho is on the fence. You need to know that he or she has other options. Be boastful but not arrogant on your listings ad. You should give some comparable or contrasting figures about some of your neighboring landlords.
You should want to become part of a commercial office portfolio. With the likes of Brookfield, Jbg Smith and Boston Properties pouring huge sums of cash into their properties, you too could benefit. There is a financial incentive for office space owners, as Brookfield is injecting $5 billion into it's retailers. Jbg Smith is pumping $2 billion into its commercial office portfolio, while Boston Properties is using $1.25 billion to keep its clients afloat. If you have a commercial property you could be kept in business by liquidity from such giants. Companies pumping liquidity into their portfolios could see less of a rise in office lease negotiations.