In today’s difficult times of leasing office space, holding onto existing tenants is even more important than ever in maintaining the economic well-being of every office building. But how do you retain businesses and keep them from going to the competition?
To answer that question, we must first understand the importance of renewing our existing leases. I call these reasons “RBIs”, or Retaining Businesses Incentives. In baseball, all managers watch RBI production closely and realize its importance. Well, you need to act like a baseball manager and understand how RBIs are cost effective and how they maintain or increase your net operating income.
RBI #1: It is cheaper to retain tenants than to bring in new ones. Tenant improvement dollars are lower on a renewal than for a new tenant. Commissions are higher for procuring a new business for your building.
RBI #2: Vacated space may remain unoccupied for many months, causing a cash flow drop.
RBI #3: Existing tenants in your building may expand.
RBI #4: Tenants may see that others have been leaving the building and begin wondering if they should look elsewhere as well. Also, space that does not re-lease in a short timeframe looks bad for the building. Your tenants are sure to notice and will possibly use this knowledge to negotiate lower rates and concessions when their leases come up for renewal.
So what can you do to retain your existing tenant base? In baseball, the manager decides who gets to play, what position and what the batting order will be. Take the role of a baseball manager to develop and field a lineup that will score hits with your current tenants, your fans. Outlined below is a batting lineup that you as manager may wish to field to win games (retain tenants).
Leading off is maintenance. A sure-fire way to commit costly errors (losing tenants) is not responding to maintenance requests in a timely manner. Tenants expect to have air conditioning, heating, light bulbs and other repair or replacement requests handled quickly, without having to ask twice. Not executing their requests is sure to lead to frustration and dissatisfaction with you and the building. If you want to try for extra bases, follow up with a personal visit to make sure the tenant is happy with the work done by maintenance.
Batting second is tenant relations. Always a big hit is visiting your tenants on a periodic basis, and not just to collect the rent. A simple hello followed by a “How is everything?” goes a long way to develop a relationship with your tenant. A tenant will appreciate being thought of and will remember come renewal time. Get to know your tenants’ businesses by talking with them regularly. People love to talk about what they do. Everybody’s favorite subject is themselves.
Batting third is tenant referral. A key player, and a sure double play, is rewarding your tenants with either money or a short vacation trip for referring a prospect to you. The second part of the double play: you obtain a new tenant, thereby increasing your cash flow. By actively promoting a tenant referral program, you are sure to win every time.
In the cleanup position is marketing week. Twice a year, have the entire lobby used for companies in your building to promote their businesses. Tables can be set up for your tenants to leave business cards, brochures and other promotional materials for other tenants and visitors. Tenants will be highly indebted to your going out of your way to help them to promote their products and services.
Batting fifth is tenant party. Once a year, in the spring or in December, hold a party for all your tenants. It does not have to be expensive. You can provide the main entree and the tenants can bring side items like desserts, salads, pastas or cheeses. Not only does this cut down on your expense but develops a sense of community where everyone participates. A get-together will help companies feel that you value and appreciate them for choosing to have their offices in your building. This party will also allow them to meet others and possibly build business relationships.
Batting sixth is a seasoned veteran, building appearance. Pay close attention to the cleanliness of your parking lot, landscaping and common areas such as hallways, lobbies and rest rooms. Make sure that the bathrooms have plenty of paper towels and soap. Insist that the cleaning crew do a consistent and quality cleaning of every suite. If the building is not well maintained, kept clean and void of debris, your tenants will not be happy and will be embarrassed for clients and other visitors to associate them with the building. A slipup in keeping the building appearance topnotch is a sure way to make an out an lose tenants.
In the seventh position is tenant directory. A true utility player that is used in conjunction with other players will surely help you win over some tenants. You simply compile a listing of the names of all the companies in your building with a contact person’s name, phone number, address, suite number and a description of their type of business. This directory is then handed out to all the companies.
In many instances, companies will use the directory to solicit business or to find a company that has a product or service that they need. Another useful purpose of this directory is that it allows you to contact the company after hours if there is an emergency. Again, tenants will be thankful for the effort and thoughtfulness. You will also be perceived as a professional.
Batting eighth, and always a true champion, is tenant welcome. When a new company moves in, make them feel like they are in their own home ball park. You personally, not your maintenance staff, give them the keys to their suite. Give them a personal tour of the building to ensure they know where the mail room and the overnight express boxes are located. If you have conference rooms, show them how to sign up and where to get the keys. Furthermore, have a welcome package ready the first day your tenant opens for business. Include a handwritten personal thank you note communicating your appreciation of their choosing to open an office in your building. At this time you may also want to include a form for them to be included in the tenant directory.
Rounding out the lineup is tenant profile. This one is always good for extra bases. After a new company moves in, do a profile on that company’s business. Then, have it nicely printed and distribute the one page profile to all the other tenants. Again, you are making the company feel a part of the family.
Finally, in the bullpen to seal the victory (tenants renewing) is special favors. You and your maintenance staff should do whatever is necessary to do those little special favors for your tenants. If a tenant’s car battery is dead, offer a jump start. If a tenant’s car lights are left on, go notify them.If a tenant needs a lock changed quickly for security purposes (due to an employee’s leaving), have maintenance do so immediately.
To play the game right and to score runs easily and often with your tenants, you must have a talented lineup to put on the field every day. Remember, making tenants feel special, responding to their needs and treating your office building like your home are the three areas that will score a triple play every time.