When you manage or lease a commercial, industrial, or retail building you have to track the leasing issues, not only for the landlord, but also for the tenant. The performance of an investment property is impacted by rental and lease documentation in a variety of ways; you do not normally want a vacant property.
The Property Manager or Leasing Manager for the property has to keep things under control and on track to the property strategy, business plan, and tenancy mix.
To solve the problem it is best to run a leasing activity reporting process and update it at least monthly. Within each month the report becomes a moving tool to support the property investment for the landlord. It is a document that tracks:
- Current lease activity
- Forward lease changes
What you are normally looking to avoid here with the report is disruption to cash flow or something that disturbs the function of the property outside of any plans you may have. Accuracy in the report is paramount as it is likely to be the main document that keeps you abreast of critical lease issues. If there is an error in the report then you will likely miss a critical date on a lease, and that can be significant in the function of the property over the longer term for the landlord.
The leasing activity report is a forward looking report usually covering the next 12 months and everything that can happen to leases and licences therein. Special attention has to be given to anchor tenants, and tenancy mix strategies that are already in place; these strategies are already active and should be continued.
In a multi-tenant occupancy, the number of leases in the building can become daunting and diverse. When the landlord owns and operates a number of properties at the same time, the matter of lease stability is also complex. The leasing activity report keeps you on track.
A leasing activity report should include the following issues:
- A tenancy schedule of current leases including upcoming predicted or known changes such as rent reviews by type and timing, options for a further term, and expiry dates.
- Status of any current negotiations with tenants both new and established.
- Signed leases report (that is for existing leases for occupying tenants)
- Submitted leases report for documents that are outstanding for any reason
- Proposals for new leases pending a decision by the landlord or tenant
- Vacancy report of areas that are soon to be or are already vacant
- Marketing strategy and inspection feedback for vacant areas currently
- Prospects currently looking at the property and status
- List of vacant areas in competing properties nearby
- Changes to tenancy mix recommended
- Schedule of rentals in the current surrounding market to which you compete
- Overview of the types and level of incentive that exists in the surrounding market
- Target rentals and target lease terms
- Summary of recent leasing decisions made by the landlord in the last month that impact the property or any vacancy.
When you use these topics for your leasing report, it is clear for you to see that most things are covered and under control. In addition to the items above it is best to provide a time line graph of events both current and foreseen to help track events before they happen.