Mariwyn Evans writes about commercial real estate for REALTOR® Magazine. You can reach her at firstname.lastname@example.org.
Be a Magnet for Tenants
A well-orchestrated property showing can move your space onto a prospect's short list. Apply these four key steps with every prospect.
March 1, 2011
1. Prep to Perfection
"First impressions are big," so there’s no excuse for showing prospective clients a space that looks less than its best, says Gray Randolph, SIOR, executive vice president of CB Richard Ellis of Virginia in Norfolk. At a minimum, vacant space should have clean carpeting and ceiling tiles, no dust or debris, and new lightbulbs.
"Cleanliness is a psychological factor. If you see a dead bug or a piece of trash, you’re going to think the whole space is dirty and poorly maintained," says Kate Good, a multifamily occupancy marketing specialist and speaker with KateGood.com in Phoenix. You can also make a space look better by taking time to turn on the lights, adjust the thermostat, and run water in the bathrooms to get rid of trapped sewer smells.
A space’s curb appeal needs to be just as polished as the interior, says Carolyn Perrigo, CPM, senior vice president of management services for Transwestern in Southern California. She assigns a special parking spot right by the front door for leasing agents to ensure that the walking route they’ll follow stays manicured.
"We try to plan a route to a vacant apartment that invites the customer to view features like the pool, the parking options, or the clubhouse prior to showing the apartment," says Good. Because renters often make the decision to lease while they're viewing a unit, "you want them to have seen all the value your community has to offer first."
2. Create a Vision
The ability to help prospective tenants see themselves living or working in a vacant space is also a major showing differentiator. Floor plans are essential, but you can do more by convincing an owner to spend a few hundred dollars on a customized space plan. "Seeing a space plan for their company helps tenants become emotionally invested in a space," says Kipp Gstettenbauer, CCIM, director with Cushman & Wakefield of San Diego. Removing walls, especially in mazelike office or flex spaces, can also help open up a space to make it more inviting, says Paula Buffa, CCIM, director with Grubb & Ellis Commercial in Tampa, Fla.
For apartments, include room dimensions on floor plans so renters can see if their furniture will fit and pencils for taking notes, suggests Good. Create ambiance with a "minimodel," which uses accessories such as towels, wine glasses, or bathroom accessories to create ambiance. "It usually costs less than $150 and can be easily moved from one vacant unit to another," says Jay Kacirk, CPM, senior vice president of Eugene Burger Management Corp. in San Diego.
For commercial spaces, show a newly decorated occupied space with a layout similar to the one a prospect wants, suggests Greg Gunn, SIOR, senior vice president at Coldwell Banker Commercial in Salt Lake City. Another option: Build out an executive suite or reception area using standard building colors and finishes. Buffa and her partner, James Moler, CCIM, have worked with a furniture company to stage smaller spaces with furniture and plants. Often companies will take the furniture along with the space.
Marketing materials are a must to have on the site even if they’ve been sent in advance. Boards on easels can highlight energy-saving options, amenities on site or nearby, or sample building finishes. Enlarged aerial photos not only remind a prospective user about valuable proximity to transit, airports, and highways but also can help a CEO or CFO get a quick sense of the drive time between home and your building, suggests Elizabeth McSweeney, SIOR, vice president of Colliers International in Atlanta.
3. Present the Benefits
Appearance matters, but the real value of a space to commercial users is in how it will enhance their business, says Andrew Zezas, SIOR, CEO of Real Estate Strategies Corp. in Somerset, N.J.
"Too many landlord brokers just open the front door and step back instead of presenting the space," he says. And you can’t present space if you don’t understand how it fits a prospect’s needs.
Zezas suggests asking questions such as "Tell me about your business’s objectives" or "How could your business perform better if you had a different kind of real estate?" Understanding a prospect’s needs can also help you recognize early if your space isn’t a good fit, says Zezas.
Tying needs to benefits is also critical in multifamily showings. "Asking prospects about their interests, what they don’t have in their current home, and why they’re relocating are great ways to identify needs," says Kacirk.
Another important question to ask up front is how much time you have to show your building, since you’re almost certainly one of several stops on a tour, says Randolph. If you only have 10 minutes, you have to focus on the two or three things in the space that solve a client’s specific problems.
A building tour can also be a great time to match prospects to your owner’s leasing objectives, suggests Randolph. It’s "a good way to test an idea to see if it matches the tenant’s expectations," he says. For example, says McSweeney, "You can let the client and tenant know that your owner doesn’t have any debt on the building, which makes it more feasible to offer tenant improvements."
4. Follow Up Early and Often
Just as critical as the showing itself is effective follow-up. That should begin the moment the tour ends, says Gstettenbauer. He tries to set up a second meeting with the prospect and tenant rep as they leave his property. Zezas favors following up within 24 hours as a way to remind prospects of your building. After the first contact, he calls the rep weekly for the first month, then monthly.
Photos are another way to help a prospect keep your property at the top of their mind. Perrigo sends a CD with design drawings of the space that users can manipulate. A link to a Web site with pictures or a virtual tour also helps to keep your space memorable. A low-cost option: Make an on-the-spot video with a Flip video camera and e-mail it to the prospect.
Follow-up conversations should also cover any tenant reps’ negatives about a property and information on where each prospect eventually leased. "Getting comps is essential. Sometimes you couldn’t have been competitive. But if there’s a problem with the property or the presentation, you want to know about it," says McSweeney. Otherwise, a poor first impression can scuttle a possible deal before negotiation even starts.