Turning Commercial Real Estate Agency Challenges into Opportunities

In this property market there are certainly some challenges for commercial property investors and business owners.  Occupancy costs are rising or remain substantial, and locating tenants can always be a challenge if there is a high vacancy factor in the local area.  Supply and demand will always be a concern for commercial or retail property owners and investors.

In essence, the local business community is the backbone of the income generated from commercial property; when the economic environment becomes frustrating or slows down, the business community can take a conservative viewpoint.  That will then have flow through to the occupancy trends and rental payments in commercial property.

The local property market will recover from these challenges, however the issues exist now and there are some real opportunities for specialist commercial real estate agents in this type of property market if they respond to those challenges.  A keen eye for opportunity is required.  A diligent process is required to take the right action.

So exactly what are the challenges and how can we turn them into those opportunities that we need?  Here is a list of issues that we commonly see around the commercial property marketplace:

  1. Too many businesses not fully utilizing their available occupancy space.  They are then looking for sub tenants or situations of lease assignment.  That will allow them to ease the burden of any rental payments.  The abundance of space that’s available in any sub leasing situation will create a lower secondary market of rental.  That lower rental can destabilize the market rental in quality properties.
  2. Property owners are struggling with vacant space.  Too much vacancy space can mean tenant volatility and downward pressures on market rental.
  3. The levels of market rental vary substantially between properties in the same category because of the higher levels of vacancy in the local property market.
  4. The incentives that apply to new leases create a wide gap between effective rents and or face rents.  Many landlords are offering incentives to entice tenants to their property.
  5. The supply of new space to lease from new property developments is undermining the leasing situation in other established properties.

A top commercial real estate agent can see opportunities in these situations.  Behind all of these challenges and issues, are the facts of property occupancy that relate to successful businesses and tenants in the local area.  There are successful businesses out there; get to know their property requirements and build a strong relationship for the times that they will need to change property location or property type.

A successful top agent in this market will focus on the relationships that they have with the business community and successful property owners.  Getting to know the local businesses and all of the decision makers behind them will help with any future lease opportunities and lease placements.  This is where your database as an agent becomes so important to the future listings and commissions that you generate.

So the message here is that the existing property market has opportunities for those real estate agents that look creatively into the issues and challenges.  Get to know the local business proprietors and their requirements when it comes to property occupancy, property purchase or sale, and any relocation requirements.

The commercial property market doesn’t disappear, it just changes.  As real estate agents, we can adjust to those challenges and adopt our services to improve situations for business leaders and property owners.

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