Part II – QUALIFYING
Are Your Tenant Prospects Fully Qualified?
10 Key Questions Will Help You Determine:
How do I know you have the right tenant for my property?
Will they be successful for the duration of the lease?
How can I expedite the process and get to the salient facts?
Use this checklist of questions & incorporate into your daily process:
What specifically are you looking for in a retail property?
What is the prospect’s ideal size requirement? Do they need end caps or other high profile location within the property? Is grocery or other major anchor required? Do they have delivery of products that require a loading dock or other rear access?
What is the USE?
Does the Use match the tenant mix for that particular property? Are there existing restrictions and/or exclusives that would prevent the Use? Ultimately it is the Landlord’s decision to make for each Use. It is a good rule of thumb to qualify the specific uses your Landlord will absolutely not approve prior to beginning your marketing campaign.
Why are you looking for space?
Is the prospect relocating from another property? Is this a new start up business, or a second (or more) location? If the prospect is opening a franchise, are they approved as franchisee? Has this location been approved by the franchisor?
Do you have any special requirements for the space?
Does the prospect have power requirements that may exceed what is currently serving the Premises and/or center? Do they have parking requirements that must be code verified? How about a specific linear storefront requirement? Single or double door required? Restaurant prospects will always have several special requirements you need to be aware of, including grease traps, gas lines, water lines, and more.
If relocating, what specifically is the reason for moving?
Is the prospect willing to give a Landlord reference? If they need more space, this could be indication of a successful tenant. It is possible you might uncover a hostile situation that must be disclosed to your Landlord. Keep in mind – in the current leasing market many prospects are simply gathering rent and NNN quotes, to aid them in the renewal of their existing lease.
How long of a lease term do you want to sign?
Shorter term leases offer fewer incentives than longer term leases. Does the Tenant require a term to match a financing requirement, such as 10 years? Prospects often ask how much TI the Landlord is offering; there is a direct correlation to the length of a lease term and the amount of TI a Landlord is willing to invest into a new lease.
What is your rental budget?
How much can they afford to pay including NNN charges? Does the prospect, if a startup, have a clear understanding of startup costs for a retail lease, i.e. Security Deposits, Advanced Rent, capital for construction, signage, advertising, etc.? If they have a Business Plan, they are ahead of the game and more qualified to move forward with the transaction.
What is your timing?
When are they prepared to move? When do they need to open for business? You may have space coming available in the future you can direct them to if they are not under deadlines. In a more competitive market, understanding of timing is essential. You may need to disclose the level of competition for vacancy, assisting in driving rents higher, and creating a sense of urgency for prospects that may not be fully committed to opening the business.
How will the operation be financed?
What is the source of Capital? Will they be obtaining financing? If so, do they have a pre-approval letter from a Lender? It’s a good idea to have a Commercial Lease Application form to send to all prospects to fill out prior to showing space. This process will easily weed out “tire kickers” that have no real intention of opening a business.
How did you come to us?
Sign call? YouTube video? Direct Mail? Referral? Understanding the source of your prospects will aid you in directing your marketing efforts.
As a leasing agent, when using focused questions like these, you obtain more information and differentiate yourself from your competition. What type of prospects are coming to your property, When those prospects are ready to move forward, Where those prospects need to be located, Why they are seeking space, and How prepared are they as business operators are basic fundamentals for understanding how qualified your prospects are, and where these prospects are in the deal process.
When you fully qualify prospects for the correct location – you save time, save your intellectual capital, and make recommendations to your owners leading to long term successful tenants.
Bradley T. Balbo | Senior Vice President
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