How DC Commercial Property Owners Can Increase Tenant Retention
According to Jones Lang LaSalle, it can take up to two years to recover the income lost from a single tenant vacating your commercial property.
For a high-value real estate market like DC, a commercial property is a large investment, and requires continual monitoring and maintenance to keep tenants happy year after year. While the turnover may be high, the economy is stable and proximity to the Federal Government makes properties extremely valuable.
That’s why it’s critical that you take steps to ensure your property is in good working order. In addition to maintaining your property, the tenant relationship is a crucial part of your success.
Here are five things you should do to ensure that tenants remain satisfied:
Keep In Touch
Relationships are crucial. There is plenty of real estate in the DC metro area. Tenants who feel like you don’t value their business may be easily swayed by attention lavished on them by others. Not only should you be sending regular communication via email, but your property manager should reach out personally on a regular basis to make sure there are no issues.
Don’t wait until their lease is ending to start talking about renewals. A good property manager will start negotiating a new lease up to two years in advance.
2. Be Responsive
Don’t hide behind policy when a tenant comes to you with an issue. Listen first. If you need to consult with others, let them know you will get back to them quickly, even if the issue doesn’t appear to be time-sensitive.
Your tenants are the reason you’re in business. Owning a commercial building doesn’t make you instantly profitable. What seems like a small issue to you could prevent them from renewing their lease.
3. Maintain Your Properties
While the upfront costs may make you cringe, the long-term return on your investment is worth it. Energy efficiency and green certifications are a good investment. This will provide a cost savings to your tenant and make them more likely to stay with you in the long term. A study by The Journal of Portfolio Management showed that certified green buildings yield a higher occupancy rate in both Canada and the US.
4. Be Proactive
Inspect the building regularly to catch any problems before a tenant notices them and correct them promptly. Though the main purpose is risk management, it’s also makes the tenants feel good that you care enough about the building to take care of any issues.
If you have a healthy amount of tenants, survey them to find out how they feel about the building and your service. Allow them to fill it out anonymously, and provide an incentive like a drawing for a gift card to motivate them to complete the survey.
Communicate the results to all tenant regardless of their participation and let them know how that affects your plans for the future. Be sure to follow through.
5. Respect Their Business
As the owner of a commercial space, it’s tempting to allow any business to rent a space to keep the occupancy rate high.
But it’s not a good idea to allow two competing businesses to rent the same space. Though it may seem to be a good financial decision, you run the risk of damaging a valuable tenant relationship and losing out on renewals.
Not only could you lose your current tenants, word may get out and other businesses will think twice before renting from you.
Commercial property management in the DC metro area is a risky business if you go at it alone. With careful planning and good maintenance, your building will substantially increase profits for years to come.