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Colliers International Commercial Leasing Guide 2010
 

Colliers International Commercial Leasing Guide 2010

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Colliers International Commercial Leasing Guide

Colliers International Commercial Leasing Guide

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    Colliers International Commercial Leasing Guide 2010 Colliers International Commercial Leasing Guide 2010 Presentation Transcript

    • The Commercial Property Leasing Guide A RESOURCE FOR LANDLORDS & PROPERTY OWNERSColliers International Commercial Property Leasing Guide P. 1
    • “The broker showed up with a big, fancy WE WANT TO proposal and made me all sorts of promises about ENSURE YOU what she would do for my property— but nothing has NEVER SAY THIS. happened.” That’s why we created this guide exclusively for landlords and property owners, to help you choose the right business partners— brokers and property managers. We also offer suggestions on setting the right strategy for your building and following through with measurable solutions and accountability. “What really makes me mad is that the building down the street just leased to a tenant that I didn’t know was looking.” “He hung a sign and made a flyer… and then waited for the phone to ring. I haven’t heard from him in a month, so I assume he hasn’t done anything.”P. 2 Commercial Property Leasing Guide Colliers International
    • Contents>4 PROPERTY LIFE CYCLE >8 ANOTHER ONE BITES THE DUST > 14 STAYING ON THE SAME PAGE Approach your asset from every angle, Property managers can make or break Set up a specific, customized reporting taking advantage of unique collaboration. tenant retention: paving the way toward plan to track not only your building’s leasing a win-win lease renewal or turning off performance, but also the performance of a tenant prospect. competing properties.>5 TOP 12 LANDLORD MISTAKES Find out where other property owners stumble in leasing decisions, from leasing > 10 BEYOND CURB APPEAL PLUS: the wrong space first to spending capital Positioning your property against competitors 7 Prospecting Hierarchy improvement dollars in the wrong place. starts with a story—creating a compelling 7 Transaction Filter hook that makes prospects take another look. 9 True Cost of Vacancy>6 ASK TOUGHER QUESTIONS 9 Tenant Survey Don’t settle for the same old claims of > 12 HAVING ALL THE ANSWERS 9 Leasing Process Chart “biggest, smartest, best.” Before hiring a You think you know your building inside-out. 11 Defining Your Building’s Theme broker, cut to the core of what makes them Pinpointing certain property limitations early 15 Key Contract Considerations different and find out how they will add real avoids prospecting to the wrong tenant market. value to your building.Colliers International Commercial Property Leasing Guide P. 3
    • The PropertyLife Cycle ACQUISITION > Appraisal > Investment sales EVALUATION & IMPROVEMENT > Capital markets > Brokerage leasing services financing > Project management > Consulting DISPOSITION > Contract administration > Investment sales LEASING & STABILIZATION > Valuation > Brokerage leasing services > Property management > Lease & tax auditACCESSING THE RIGHT RESOURCES We’re working to fundamentally change your partner, and how to set up systems to ensure management, valuation, project management,AT EACH STAGE OF OWNERSHIP experience from a relationship with a vendor future success. mortgage banking and consulting. Although to a strategic partnership. you might not need all of our professionals atThis is not a promotional brochure. It’s not A key theme that emerged was that owners all times, we believe the team approach helpsabout us. It’s about you—owners and asset What makes a partnership work? We listened want their service partners to see them us offer a seamless experience at any stage.managers—and how to get the most out of to dozens of success stories—and horror stories through a property’s full life cycle.the services provided by brokers and property —from clients, brokers, property managers At Colliers, partnership means approaching That’s why our approach is based on anmanagers. and asset managers to find out. This book is assignments with clients’ interests first, and integrated team, including brokerage, property about how to carefully choose your business treating the property as if it were our own.P. 4 Commercial Property Leasing Guide Colliers International Colliers International
    • Top 12 Landlord MistakesMAJOR MISSTEPS THAT CAN SLOW OR DERAIL YOUR LEASING EFFORTS 1. Signing leases without a strategic 5. Hiring a broker without the a come-as-you-are creative firm 12. The biggest mistake? Lacking a plan. A whole-building approach right specialization—experience is bound to create friction. story. Your building should have a to leasing is critical to achieve working with properties of a compelling message that differenti- 9. Pricing the building incorrectly. the best rates and best tenants. similar type and location. ates it from the competition. Holding out for an extra nickel 2. Leasing the best space first. This 6. Failing to investigate the tenant’s or dime in pricing may keep the The building’s story should be can devalue the rest of the building’s finances, business plan and revenue building stuck in vacancy limbo. tailored to a key tenant driver, such available space, such as leasing stream, and failing to require a 10. Failing to evaluate the competition. as visibility, tech infrastructure or half of a floor with a better view, substantial security deposit. Ruthlessly compare your building’s accessibility. Some landlords develop or leaving small spaces vacant. 7. Allocating capital incorrectly: pros and cons against competitors— a theme or foster tenant clustering. 3. Failing to ensure each tenant’s spending money on things that aided by your broker—to determine lease terms support the long- won’t help lease the building, such your unique selling points and high- The “story” is a creative ele- term investment objectives for as replacing sconces on the exterior impact improvements. ment of a leasing business plan repositioning or disposition. of a building. A better use of funds that many brokers fail to develop. 11. Forgetting the small stuff. might be replacing dated light lenses Your broker will collaborate with 4. Faulty termination clauses that Prospective tenants can be turned in a vacant space to refresh it. Ask, you to identify and enhance your allow tenants easy “outs” can leave off by the little things, so keep “Does my improvement help lease property’s unique story, and then you, the landlord, with unamortized empty spaces free of debris, lights the building more quickly or at a use that story’s powerful potential costs from tenant improvements working and blinds open. Common higher rate?” before spending. to drive tours and contracts. (TIs), incentives and fees. areas should be clean, parking 8. Choosing incompatible tenants. and signs in good condition, and Placing a staid law firm next to a consider investing in seasonal bustling sales organization or plants at entrance points.Colliers International Commercial Property Leasing Guide P. 5
    • Ask Tougher QuestionsTEN QUESTIONS TO CLEAR THE CLUTTERAND HELP YOU CHOOSE THE RIGHT PARTNERVirtually every commercial real estate broker tells property owners property will not be their top priority (or even Our resources cross geographic boundaries,the same story. They are experienced. They’re knowledgeable. They’ll close). These brokers may speak only in general property types and client types.work hard. They’ll spend a lot of time on the project. They promise, terms to what they’ll do for your property.promise, promise, promise. To ensure your broker will devote substantial WHAT IS THE BROKER’S SERVICE time to the project, ask to see the broker’s GUARANTEE? detailed marketing strategy and action plan. Although no one can guarantee an outcomeBUT WILL THEY DELIVER? WHAT IS THE BROKER’S EXPERIENCE? For example, ask whether the broker will based on the marketplace, our sales profes- be present at every property tour. They can sionals and their support teams are committedChoosing a broker as your business partner Your broker should provide information describe the value proposition of the building, to keep their promises.is daunting, especially when wading through on his or her track record of dealing with learn about the motivations and needs of thea sea of sameness. These points—questions similar leasing challenges, similar building That means we guarantee our services through prospect, and hear feedback that can help yourto ask when hiring—are designed to clear the types and buildings in the same area. a specific action plan. We will define, from the positioning.clutter, and help you choose the partner who beginning, expectations for service, reportingbest fits your needs. and accountability. WHAT IS THE BROKER’S MOTIVATION? WHAT ARE THE BROKER’S RESOURCES? Will your goals for the property be alignedWHAT IS THE BROKER’S SPECIALIZATION? Many boutique and local commercial real estate WHAT IS UNIQUE ABOUT THE BROKER’S with the broker’s goals? For example, hiring firms have very limited platforms, with little KNOWLEDGE?Does he or she focus specifically on the geo- a broker who is not specialized in properties research, marketing and administrative support.graphic area where your building is located like yours might mean he or she spends less Beyond the quarterly market reports that everyand your building’s type and class? Does the time studying your submarket and specific At Colliers, we believe a collaborative approach company seems to have, what kind of insightbroker specialize in representing owners? challenges in-depth. serves our clients best, which is why a portion can your broker offer? What uncommon market of your gross commission dollars supports our knowledge will help you identify trends andWe believe it’s impossible to know the market specialized team of researchers, marketers take advantage of them, or ensure that you seeunless you live, sleep and breathe it, which is WHAT IS THE BROKER’S CAPACITY? and administrative staff, who provide deeper every tenant prospect in the market?why we strongly support specialization. Some brokers who claim to dominate the market market insight, unique go-to-market strategies, have taken on so many assignments that your and responsive administration.P. 6 Commercial Property Leasing Guide Colliers International
    • PROSPECTING HIERARCHY TRANSACTION FILTER How we segment tenant targets to reach the best How marketing moves a tenant prospect prospects with the strongest tactics toward a successful transaction TERTIARY We ensure we connect The prospect is AWARENESS with every potential aware of the building target with broadcast availability, its location tactics, such as and features advertising, online UNDERSTANDING The prospect sees value listings, signs and network exposure. for his/her own business & PRIMARY PRIMARY unique needs We connect with the best The prospect tours the INTERACTION prospects building and/or does through personal space planning contact such as calls and tours. TRANSACTION SECONDARY The prospect moves We connect with our database list through the negotiation of appropriate targets through direct and contract phase. marketing flyers, mail and e-mail, and broker contact.WHAT IS THE BROKER’S METHODOLOGY? strategy. But prospecting for tenants requires A marketing strategy that takes each prospect and converting likely tenants, as well as a a more thoughtful approach on two levels. through the transaction filter to build awareness, supporting a broadcast marketing programFind out whether the broker considered all of understanding, interaction and then cement the (such as advertising, online listings and signs)the possibilities for your building before they First, the broker must define which tenants transaction is critical. Otherwise, your broker to ensure every potential tenant is aware ofselected their action plan. are most likely to lease the space and pay the may be basing your building’s promotion on your building’s opportunity. highest price. The characteristics of this groupToo often, brokers simply recycle a proposal little more than a flyer, a sign and a prayer. should be used to sort the database. The broker If you’ve worked with several brokers in thefrom one owner to the next. We believe you should describe how a high-touch, personal and past, consider which of them were true busi-deserve a plan tailored to the unique opportu- fast-acting campaign will be implemented. HOW WILL I KNOW I’VE SEEN EVERY ness partners, working in an advisory capacitynities and challenges of your property. OPPORTUNITY? to support your building’s value long after the Second, the broker must define how each mar- tenants had been placed in your vacant space. keting element connects with a specific group Among owners’ greatest fears is missingWHAT IS THE BROKER’S STRATEGY? of potential tenants, including those prospects an opportunity to lease their space to the Your assignment should open the door for theMany brokers submit a laundry list of market- that you didn’t even know were looking. best possible tenant. The broker should broker to add value to your business, both nowing tactics to a landlord and call that their provide a clear plan for defining, approaching and in the future.Colliers International Commercial Property Leasing Guide P. 7
    • Another One Bites the Dust A relationship with the property The property manager could have worked out reported back to the owner for a complete manager is key to tenant retention. the problem in advance, by scheduling the perspective on the property. contractor for a day the sales organization was Property managers must also get out of their closed, by temporarily relocating the sales offices frequently to walk the building and force, or by rebating rent or another financial personally connect with the tenants. Only It seemed like the hard part was behind incentive for tolerance. But after the fact, few through this routine face time will they notice them—the broker identified a good prospect, solutions were possible, and the tenant said, simple things like a broken handle or missing brought the firm in for multiple tours, helped “You’ll be hearing from my lawyer.” outlet cover. the owner through negotiations, shepherded “Tenants have long memories,” said a Colliers the contract through legal review and, finally, A towel dispenser hanging askew might never manager, who previously worked as an handed the keys to the new tenant. be reported by tenants—it’s not critical—yet owner’s representative. “You can have the tenants will continue to be annoyed by it until And then it all fell apart. best customer service on the planet, but it’s fixed. when property management breaks down The number one reason that an owner’s through lack of foresight or poor communica- Security personnel can be a strong partner, relationship with his or her tenants falls apart tion, that one action can strike a fatal blow as these people are often the most visible is lack of communication—and this is often against all the goodwill you had built up.” members of the building staff. Those who the responsibility of the property manager. learn tenants’ names and make an effort That’s why owners should carefully select For example, one property manager sent to provide a personal touch can take the a property management company with the tenants a memo about street construction tenants’ overall experience from average to experience to anticipate and solve problems the next day. And sure enough, the next day, exceptional. before they happen, and the resources to take the property owner got a call from a tenant care of issues immediately. Ultimately, property management is an who was shouting into the phone because essential link to a building’s positioning. When he couldn’t be heard over the jackhammer in Colliers’ 24-hour Service Center logs, tracks a manager demonstrates they care about the the street. There was no way his sales force and reports every call to reveal common building, in the tenant’s mind, it also means could work with that kind of disruption. tenant concerns, frequent maintenance “they care about me.” challenges and property trends. These areP. 8 Commercial Property Leasing Guide Colliers International
    • LEASING PROCESS CHART OBJECTIVE SWOT ANALYSIS* STRATEGY TARGETING TACTICS EXECUTION EVALUATION> Owner’s long-term > Define competitive set > Create a building > Define target > Plan marketing tactics > Create system for > Gather and synthesize investment goals “story” prospects’ unique tactical execution prospect feedback > Create building > Determine direct characteristics> Building’s immediate improvement plan > Develop marketing tactics and volume > Track each prospect’s > Evaluate activity, and future leasing plan to support this > Create target tracking progress through strategy, tactics > Determine unique > Determine broadcast needs story lists from databases transaction filter and price selling points tactics and frequency > Determine next steps *Strengths, Weaknesses, Opportunities and Threats The True Cost of Vacancy HOW THE COST OF REPLACING A TENANT CAN ADD UP FOR PROPERTY OWNERS Losing a tenant can be a bigger financial blow Professional services—including space plan- Signs—both inside and outside the building Tenants can also be allies—or detractors—in to owners than simple loss of income. ning, architectural and consulting services the leasing process. Professional services—legal, accounting and The cost to re-lease and refurbish a space can Demolition—removal and disposal of the management fees Consider asking these questions, and be sure add up, which is why spending a little extra to former tenant’s improvements to follow up on any “trouble areas” as well Relationship—to other tenants: is another ensure strong tenant retention can yield solid as using the information from the latter two Materials—for tenant improvement tenant’s business tied to the departing tenant’s? financial returns in the long term. questions to create your building’s story. construction We suggest taking into account the full scope – What are we doing right? Labor—for demolition, construction and TENANT SURVEY of potential costs when choosing whether to systems installation – What can we do better? renew a tenant in their existing space. Tenant surveys can increase satisfaction Moving costs—a typical incentive to encourage for your current tenants, and highlight both – What about the property supports your Vacancy time—no lease payments made a tenant to relocate benefits and problems with your property. business goals? Marketing costs—signs, open houses, direct Free rent—in some markets, free rent may Surveys offer a rich source of information to – Why did you choose this property/location? mail, property web sites, tour incentives be offered in lieu of or in addition to tenant owners and brokers who are preparing a leas- Leasing costs—brokerage commission, improvements ing strategy for the property’s vacant space. leasing incentives Colliers International Commercial Property Leasing Guide P. 9
    • Beyond CurbAppealDEFINING THE PROPERTY’S UNIQUE VALUEAND HAMMERING IT HOME WITH PROSPECTSA standard approach to marketing commercial real estate—how much to court companies with an in-and-out sales cities have a walking culture, skybridges orspace, how much cost—is an analog approach to this new digital world. force or a high volume of clients who come underground building connections to protect and go throughout the day. occupants from inclement weather. In otherMany commercial real estate flyers advertising vacant space fall into cities, anything more than a two-block His story about the building’s unique and distance will prompt employees to reachthe same ho-hum, heard-it-before advertising patterns: “Well-located, unparalleled access created a compelling for their car keys.modern building with flexible spaces and good parking. Access to selling point, attracting some businesses that hadn’t considered the importance of Use a realistic approach to what “walkingrestaurants and services minutes away.” this access. distance” means in your city, and then draw that radius on a map around your building. Another landlord realized that his building’s By fully investigating all of the businessesWhich building is that? It could be any property. of downtown. By heavily marketing the devel- large floorplates were perfect to accommodate and services in your building’s area, you mayIt’s like a personal ad that says, “I enjoy long opment’s next-door neighbor—a world-famous a sea of cubicles, and a work force that would be able to offer prospective tenants far morewalks on the beach, nice restaurants and good bookstore—the broker literally got the project come in the morning, stay all day, and then go amenities than they first see.conversation.” Who doesn’t? on the map in the minds of prospects. home. Although he had planned an expensive lobby upgrade, he cancelled plans for this dueDifferentiating a building starts with a specific By identifying the property’s authentic to the fact that it wouldn’t impress his tenantinventory of the building’s attributes, both inside differentiating factors, you’ll find the “hook” targets—they didn’t have many clients visiting,and outside of the structure. Your brokerage you need to stand out from a sea of so-called so they weren’t willing to pay higher leaseprofessional will create a story about the “well-located” properties. rates for a building with expensive art anduniqueness of your space to help you avoid For example, the owner of one building realized marble in the lobby.the price wars of commodity space. that there were five ways to get in or out of his It’s critical to take into account the cultureFor example, a five-block office and retail property, while the competing buildings had of a city and the building’s location. Someproject was perceived to be on the fringes only two. As a result, he positioned his propertyP. 10 Commercial Property Leasing Guide Colliers International
    • Telling a StoryCONSIDER THESE THEMES TO DEFINE YOUR BUILDING’S UNIQUE ADVANTAGESTRANSPORTATION SUSTAINABILITY/ FAMILY FOCUS FITNESS/ LEISURE/ CLIENT/ TECHNOLOGYFOCUS GREEN FOCUS LIFESTYLE FOCUS CONVENIENCE FOCUS INDUSTRY FOCUS FOCUSNear transit (bus, light LEED-certified building On-site or adjacent day- Bike storage, lockers Excellent restaurant Cluster around a Wi-Fi-enabled lobby withrail, streetcar, etc.) care; short-term parking or showers on site on ground floor courthouse or other work stations or modular Modular and sustainable for pickup and drop-off government building furnitureIngress/ egress to tenant improvements Near fitness center Client entertainmentthe building Near community center or swimming pool space or conference Adjacent to clients, In-floor cables for easy Alternative transportation room with catering suppliers or similar office reconfigurationEasy freeway access support, e.g. bike lockers, Near schools Park or open area for available businesses within a and access transit, car-sharing or lunch al frescoFree or less-expensive Near park, “splash pad” specific industry carpooling Adjacent or on-site High-speed internet trunkon-site parking or kid-friendly water Rooftop garden or patio services such as grocery, Building name or line, full-building Wi-Fi, Building recycling & featurePreferred/reserved Located in an area pharmacy, medical, dry business park reflects high quality telecom composting programparking spaces available Room provided for favored by an employee cleaning or convenience/ industry cluster Data storage or backup Farmer’s market nearby breastfeeding moms demographic for housing sundry itemsCar-sharing service Space located near services available or entertainmenton site On-site or adjacent marquee brands, such Strong HVAC or high- business, shipping or as a luxury retailer onCarpool parking free; capacity electrical for copy center the ground floor of adesignated parking heavy user of electronic downtown office building Retail, food and services equipment located near industrial parksColliers International Commercial Property Leasing Guide P. 11
    • Having All the AnswersINVESTIGATING THE BUILDING’S ATTRIBUTES WILL AVOID DEAD-END PROSPECTINGMany landlords and their brokers fail to investigate their buildings’ full have cable, only satellite, so brokers realized – Janitorial/cleaning staff must be promptset of possibilities and drawbacks before taking it to market. These are it was a waste of time to pursue any business and thoroughsome often-overlooked considerations that can make or break a deal that required cable. Companies with phone – Elevator must be in good working condition providers that require a redundant fiber loopwith a potential tenant. will also be the wrong fit for a building that – Parking must be easy to find and access lacks this system.EFFICIENCY advantage, particularly if a broker has knowl- TENANT MIX edge of comparable buildings’ typical charges.A competing property might offer a slightly MANAGEMENT This is an opportunity to capitalize on building Some buildings are marketed to the wronglower lease rate, but the leasing agent can efficiency improvements such as the HVAC Property managers are tenants’ primary point prospects simply because the existing tenantscombat this by speaking to the space efficiency system or energy-saving switches, which of contact with the building owner. Smart were not taken into account. It’s not only thatof the owner’s building. ultimately save tenants money. prospects may speak with other building tenants some tenants will clash with others, but alsoFor example, the competitor may offer a before signing to find out about the manager’s that positioning a building as “the place to be”10,000-square-foot space with a 20 percent responsiveness and the quality of the man- for a targeted group of companies will actually BUILDING SYSTEMSload factor, meaning that one-fifth of the leased agement, engineering, security and janitorial support a higher rental rate. Tenants that see aspace on which the tenant pays rent is not Infrastructure can have a big impact on the services. specialized opportunity with a combination ofusable for business purposes—it’s made up feasibility of certain uses, and some landlords benefits that are unmatched in the marketplace So before taking a property to market, considerof elevator lobbies, hallways and restrooms. find out too late that they are pursuing business are more likely to pay higher rates. the performance of the property manager, they can’t possibly accommodate.The landlord’s property may offer 10,000 square their level of involvement with the property While many companies look to the bottom linefeet with a 12 percent load. Even if the com- For example, technology users with major and their face time with existing tenants. cost when deciding where to locate, that ispetitor’s rent is cheaper, the landlord’s building power and cooling needs might not be right Based on regular tenant surveys, Colliers has rarely their only consideration. A “cool” factormay be a better deal because the tenant can fit for a building that lacks the HVAC muscle. In found the No.1 factor that determines tenant or singular benefit might be enough to sway42 desks in that space, but only 35 desks into another case, a mobile workforce that needed satisfaction is the quantity of contact tenants the decision if all things are equal betweenthe office with the higher load factor. substantial guaranteed parking wasn’t the right have with the property manager. competing properties—but they rarely are equal. fit in a downtown building that already had too That’s why it’s critical to develop a handful You can also take steps to solve the most many monthly parking contracts. of benefits that add up to a singular valueOPERATING EXPENSES common tenant complaints: proposition for tenants. Choosing the right target audience will avoidThe true cost of a tenant’s energy, taxes, – The heating, ventilation and air cooling system wasting time and effort on those never-going-janitorial, maintenance and other pass-through (HVAC) must be working well (building to-work tenants. One downtown market did notcosts adds up and can become a competitive temperature is the No. 1 tenant complaint)P. 12 Commercial Property Leasing Guide Colliers International
    • GREEN BUILDINGSustainability is much more than a buzzword;many local governments have mandated greenbuildings and businesses are increasinglymoving this building attribute from the “nice tohave” category to the “must have” column, asan essential aspect of supporting their brands.It’s important for the broker to be well-versedin green building terminology and practices, sothat the building in question can meet tenants’specific requirements. For example, theLeadership in Energy & Environmental Design(LEED®) Green Building Rating System™,provided by the U.S. Green Building Counciland other GBCs worldwide, offers multiplelevels of certification, from platinum to bronze,to describe how “green” a building is.Colliers provides both broker and clienteducation to support sustainable buildings andsustainable business practices, helping ownersdevelop, purchase and improve high-efficiencybuildings, and strategically lease buildings withgreen attributes.Studies cited by the USGBC have shown thatgreen buildings command higher prices insales and leasing, and typically have a fasterlease-up rate than conventional buildings.Colliers International Commercial Property Leasing Guide P. 13
    • Staying onthe Same PageA CLEAR AND CUSTOMIZED APPROACH TOREPORTING PUTS ACTIVITY IN CONTEXTThe worst-case scenario for an owner starts That’s why our approach to reporting and buildings similar in size, location, amenities, feedback. While many brokers simply speaklike this: he or she issues a request for communication with landlords starts with price or quality, and report on leasing activity with the tenant prospect’s broker after a tour,proposals, and receives several thick tomes a commitment to a single point of account- in these buildings as well. Colliers brokers have found that an incentivizeddescribing a commercial real estate firm’s ability—your one-stop source for all of the process for gathering tour comments yields This gives owners a baseline, a well-roundedservices, staff, history and track record (but information about leasing progress on your specific, actionable and unique feedback. perspective on the market’s activity, and aalas, precious little information about what building. regular assessment of how competitive their For example, in one property represented bythe company proposes to do for the owner’s That broker is backed up by his or her managing building is in context with its rivals. Colliers, both tenant prospects and their brokersbuilding specifically). director and by brokerage team partners who go to the property’s custom web site and fill Owners and brokers should also work togetherAfter the interviews (which often feel more collaborate to ensure the building gets the out a short, eight-question survey about their from day one to define the best methods oflike infomercials), the owner chooses the maximum exposure possible. impressions of the building. Those who take communication—how frequently the ownermost experienced team, or the team that the time to answer the survey receive a $30 In our proposals, we commit to describing our will be updated, how formally, and howmakes him or her feel most comfortable. Visa gift card. work in detail—not just a laundry list of tactics, thorough the update will be.The contract is signed…and then, nothing. as you may see in other proposals, but a This not only gives the owner and owner’s They should define in what format the ownerThe phone doesn’t ring. The owner hears specific strategy outlining which tactics are broker two more opportunities to connect will be updated, such as by e-mail, by spread-little from the broker. Perhaps a sign goes up appropriate for your property and on which with a prospect (through the web site and sheet, or through an online, real-time Clientand a flyer goes out, but few tours happen, target market each tactic will be implemented. by mailing the gift card), but also provides Activity Tracking System (CATS) providedand the owner is left to wonder if the broker valuable and sometimes surprising comments This specific commitment to performance is through Colliers’ proprietary IT platform.is doing anything at all. He or she can only on the building. coupled with information on who will do itassume the worst. Brokers can offer a variety of reporting and by what date it will be done, giving you It guided the landlord in this case to offer frameworks and work with owners to tailorAt Colliers, our managers are well aware that the ultimate assurance that the project can free Wi-Fi and modular furniture to his lobby, reporting to the owner’s specific needs andowners have been in this situation, because and will be completed on time. enabling tenants to have a “breakout” meeting concerns.many of them were investors themselves or session without leaving their own building. Status updates are also stronger whenserved as owners’ representatives. A unique aspect of reporting that has been communicated in context. Your broker may used successfully in several markets is touring recommend a specific “competitive set” ofP. 14 Commercial Property Leasing Guide Colliers International
    • KEY CONTRACT CONSIDERATIONS – Tenant improvements— – Tenant’s history in other buildings: certain other industries or competitors owner and user contributions landlord references from also leasing in the building– Base rental rate per square foot – Incentives, such as free rent and/or – Make-good clauses, which may specify – Contract extensions allowed, in what– Rental rate spikes—their timeline moving costs the tenant removes some TIs or returns time periods and at what price and basis the TIs to a previous condition – Tenant credit and financial statements – Supplied infrastructure and utilities– Move-in date – Adjacency or anchor tenant clauses— – Security deposit or other guarantees allowing the tenant to break their lease– Load factor—percentage of – Termination clauses if another tenant pulls out, or excluding unusable area Colliers International Commercial Property Leasing Guide P. 15
    • www.colliers.comAccelerating success.This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content,accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss anddamages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2010. All rights reserved.P. 16 Commercial Property Leasing Guide Colliers International