Now you’ve decided what kind of tenants you’re looking for and what to charge them you need to find some! In order to minimise the amount of void periods you have (times when you have empty offices not earning rent) you will need to develop an effective way of finding tenants. How you go about doing this will depend on the type of tenants you are looking for.
Once you have people interested you need to begin the process of negotiation and moving them in to your building:
How do I find tenants?
How you identify tenants will depend on the type of tenants you are looking for. If you want to let a couple of desks or a small office to other like-minded organisations then word of mouth through your network of contacts and your local Council for Voluntary Service (CVS) will be your best bet. (follow this link to find your local CVS' contact details
). Other office space providers such as the local authority or other charity sector landlords may be prepared to point tenants they can’t house in your direction. Existing tenants may wish to expand, so they should be your first point of call.
Alternatively, you can hire a commercial property agent
to advertise your premises and find tenants for you. This might be an attractive option if you have a larger amount of space to let and limited time to spend looking for tenants yourself. Agents may charge fees as a percentage of the first years rent (typically 10%) or per sq. ft. of the space let. Our guide to Using Property Professionals offers useful tips on working with agents
Building a waiting list
If you are granting short agreements or offering ‘easy in, easy out’ terms, you will have a higher turnover of tenants so should build up a waiting list to minimise voids (empty offices not earning rent). Ask potential tenants to fill out an expression of interest form with key details to keep on file so that you can contact them when space becomes available.
If you do not keep a waiting list then you should ensure that the agreements you grant have a sufficiently long notice period to allow you to find a new tenant before the existing one moves out. Alternatively you might budget for having some void periods and set the rent accordingly.
You should undertake checks to satisfy yourself that tenants will be able to pay rent and will treat the space with respect. Take references and ask to view the organisation’s latest management accounts.
If the organisation will be sharing space with other tenants, then you will need to make sure that working cultures do not clash. An organisation with lots of visitors to the office, or always on the ‘phone may well annoy a quiet, research-focused tenant.
Invite the prospective tenant to come in, meet people and see the space. If you can, visit the space they are currently renting. This gives you a feel for what they will expect from you and how they look after their space.
Talk to the potential tenant to find out:
- their expectations of how they will use their space and any shared areas
- their working practices – are they always on the phone? do they have a lot of visitors? do they plan to store lots of campaign banners in the office?
- if they offer services to members of the public - are these by appointment only, or can visitors just drop in?
- their values - are there any potential conflicts of interest with you or other tenants?
Setting the ground rules by exploring these areas will help to ensure that landlord/tenant relationships gets off to a good start.