Most property managers and commercial real estate executives know that it costs more to acquire new tenants than to retain old ones. Great tenants may be hard to get, but it’s another challenge entirely to keep them.
Why? Because your tenants are like a customer, and as long as they’re happy, they will consider their payments to you as a truly valuable investment.
Here are some costs associated with replacing a tenant according to FMLink.
- brokerage commissions
- tenant build-out allowances for the incoming tenants
- relocation costs
- concessions (such as free rent) to be paid
So what steps should you take towards tenant retention?
Plan A Tenant Retention Program!
UNDERSTAND YOUR TENANT’S NEEDS AND CONTINUE TO RE-EVALUATE THEIR SPACE
Not all tenants are the same. Some require meeting spaces more often while others need the latest in technological advancements. Perhaps your tenant will be expanding in the near future. Identifying their needs and anticipating certain changes in their needs are important so that you and your team can start to create and maintain a retention plan.
When you understand why a tenant is investing in your rental space, then you’re already on the right track to keeping them in the long run. Just like in our personal relationships, if you don’t know your partner’s goals, you won’t be able to help them reach any.
While keeping 100% of your tenants all the time isn’t realistic, it’s important to have a plan that will ensure service is up to par. The main thing is to stay consistent.
- Make sure that you evaluate the property to assess which tenants can benefit the most from being with you. FMLink recommends using a SWOT (Strength, Weakness, Opportunities, and Threats) method to analyze where your property can improve and anticipate future conflicts.
- Create a channel of communication that you can use to update tenants, remind them of any inspections or events. Or you can use your social platforms to survey your tenants and get their feedback.
- Revisit your efforts to see what has improved and keep track of when leases are up to revisit plans with tenants to see how their space can be improved! You can even offer them first dibs on new vacancies.
It’s important to note that millennials will make up 50% of the workforce by 2020. As we have noticed in the last decade, the work-life balance culture has become increasingly popular and amenities are a great way to lure in millennials.
EXAMPLES OF BASIC AMENITIES:
- Reliable WiFi
- Outdoor Space
- Dining Options
- Conference Areas
- Fitness/Wellness Center
- Environmentally Conscious Features: Glass, HVAC, Lighting, Etc.
- Plus so many more!
- Create A Referral Program Incentivize Tenants To Share Your Property With Others
- Host Parties Where Other Tenants Can Mingle And Network
- Offer A Bonus When Someone Renews Their Lease
Check Out These Articles!
Adams, Jeff. “Investor Refresher: The Basics of Increasing Commercial Tenant Satisfaction and Retention.” Spaces Commercial Real Estate Blog | Ohio, Michigan, Kentucky and Western Pennsylvania, 11 Oct. 2018, spacesblog.jll.com/investor-refresher-the-basics-of-increasing-commercial-tenant-satisfaction-and-retention/.
“Creating a Tenant Retention Plan.” FMLink, fmlink.com/articles/creating-a-tenant-retention-plan/.