One of the trickiest and most difficult issues when handling a multi-tenanted complex is to assemble the most workable tenancy mix that will function well in the long run. This means that all the tenants are happy with their leasing arrangements, content, respectful of and benefiting from neighboring businesses because they complement each other.
The challenges are many. From the temptation to accept the first application submitted for the vacant unit, without due consideration for existing tenants’ well-being, space and time requirements, all the way to the practical compatibility of the businesses that are sharing common areas and common facilities.
The first step to achieving good and consistent results starts within the Agency itself. A clear indication of solid agency fundamentals is in unbiased, good communication and positive chemistry between the leasing and asset management departments. The objectives of these two could be conflicting because of the nature of their roles. The most important goal for a leasing agent is to successfully lease the property in the shortest possible time. However, the manager of the assets wants to have a stable and trouble-free portfolio, without high maintenance demands, too many ongoing issues requiring arbitration and preferably without tenants in distress.
Any serious commercial real estate agency should always keep their standing Clients’ (commercial and industrial property owners) best interest as their priority and do whatever they can to achieve the best results through cooperation between the above mentioned views/departments.
Extra caution should be taken in the case of introducing competitors to the current tenancy mix. Complaints and concerns are often reported in complexes containing a few retail food outlets, but there are cases coming from other industries such as crash repairers, cabinet makers, hair dressing salons, bakeries etc. There has been a recent increase in this type of problem creating issues in the smaller, suburban type strip shopping centres.
Another serious concern is the possible impact of the newly introduced business activity to the complex and its tenants. This impact could include pollution (any type of physical discharge such as dust, vapor or hazardous and volatile substances associated with some business operations). Disturbance to other tenants might also be caused by vibration, noise, odours, light etc. For example, the quick decision to approve a panel beater tenancy next door to a printing shop could mean years of suffering for everybody involved. There are just so many unfortunate oversights. Another example is that of a fibre-glassing business (resin fumes, fine dust particles), next to a retailer. It is very important to keep in mind that one of the essential rights afforded to every commercial and industrial tenant is the right to quiet enjoyment.
Safety and security is an equally important issue to consider. A common sense rule is that any newly introduced tenant will not increase the hazards and risks to which all tenants, their employees and customers are exposed. That’s why it is very important for the leasing agent to make sure that the tenant is aware of their responsibility to follow all of the rules, regulations and housekeeping practices (i.e. locking the gates, securing the premises, keeping the premises and common areas tidy) that exist in the Complex.
Assembling a good tenancy mix takes time, talent and the ability to work toward desired outcomes over the long term. For an Agency to remain highly regarded and highly sought after, it is essential that they focus on the long term objectives. It is very easy to allow pressures and a sense of urgency to rob you of (potentially decades of) essential groundwork. In some cases, this loss can occur over just a few months or a year. Consider also, the C&I owners learning about the difference between honest, skillful, continuous work and carefully learned sales pitch! This could be very costly and damaging to the Agency in question.
OUR common sense – Key to YOUR success!