“Vacancy” is a word most commercial real estate investors fear. However, a vacant property is costly, so finding loyal and reputable tenants is a must for a successful real estate investment. Unfortunately, tenant screening can only tell you so much. Selecting the best tenants requires patience, patience, and experience working with a variety of clients.
Finding the Right Tenant
Before offering a three-year lease to a new tenant, you want to ensure they won’t go out of business or jump ship at the first opportunity. In order to find loyal, stable tenants, try some of these marketing tactics to draw suitable attention:
Researching Local Properties
Research competitive commercial spaces and look for tenants with a strong track record. Some may decide to expand or scale down in the future, which means they’ll be a prime candidate for your space. Building these relationships early will make you the obvious choice as they look for future commercial space.
Great Service
Word of mouth is one of the best ways to find tenants for your entire commercial portfolio. If you create a positive experience with current tenants, they may be willing to share their connections or refer you when the time is right.
The Best Types of Tenants for Commercial Properties
While no business should be overlooked, some business models are built for long-term success. If you are looking for prime candidates for your new property, search for one of these business types:
Franchises
Franchises are notorious for being highly sought-after tenants. This is because the business model has a proven track record and a nearly guaranteed customer base. This becomes more true if the franchise is the first in the area or if it is a big name in your region.
Location-based businesses
Automotive centers, gas stations, and even restaurants are often selected because they are closest to their customers. So if you have a flat tire, for example, you’re going to the nearest mechanic rather than the cheapest or a local favorite. As a result, these tenants will often see steady traffic and be able to withstand economic uncertainty.
Like-kind business
It is no surprise that if your commercial property neighbors a retail space, other retail tenants are a perfect fit. Foot traffic from one store will spill over to the next, creating a symbiotic relationship with other tenants in your space.
Businesses with low overhead
Convenient stores, car washes, and gas stations don’t require extensive staff or a high-end retail layout to succeed. So while they aren’t guaranteed high foot traffic, they can typically withstand periods of lower sales.
Legacy Commercial Group offers full-service property management services to give investors a truly passive experience. We select from a high-profile roster of tenants to ensure your property doesn’t stay vacant forever, if ever. Contact your Legacy Commercial Group representative today if you’d like to learn more about our tenant screening process or view our available properties.
