How to Find Good Tenants for Your Commercial Space
Investing in commercial real estate offers many advantages, such as consistent cashflow, capital appreciation, tax benefits, and a hedge against inflation. Commercial properties often have longer lease terms compared to residential, offering you stable income.
All these perks depend on one thing, however: finding and keeping reliable tenants. We’ll show you how to find good tenants in this guide, by implementing some solid strategies.
11 Ways to Find Reliable Tenants
Before you begin marketing, make sure you understand the unique selling points your property offers to prospective tenants.
You’ll also want to define your ideal tenant type based on research and understanding of the CRE market. Consider gaps in your property's current tenant mix.
Check out our previous guide on finding the best tenants for more detail.
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Once you’ve laid the foundations, you’re ready to begin tenant hunting. Here are some useful tips for how to find good tenants:
1. Use AlphaMap’s TenantFinder™ Feature
AlphaMap’s TenantFinder™ feature is an innovative tool that simplifies the tenant-finding process by giving you access to a large database of pre-qualified candidates.
The TenantFinder™ significantly reduces the time and effort involved in finding reliable tenants. Using sophisticated algorithms and advanced analytics, TenantFinder™ matches your property with suitable businesses.
2. Attend Networking Events and Trade Shows
Building relationships at networking events and trade shows can result in valuable leads and referrals.
At events like these, you can connect with business owners and professionals in your target market who may be seeking new spaces for their ventures.
Remember to bring business cards and marketing materials to showcase your available commercial space.
A few other handy tips:
- Actively network
- Listen to attendees' requirements
- Share relevant information about your property
3. Use a Commercial Property Manager
Property managers have extensive experience and a broad network of industry contacts. This gives them access to a wide pool of potential qualified tenants. They also handle the day-to-day management of your property.
Property managers can handle various aspects of the tenant selection process, including:
- Marketing (e.g., on portals such as LoopNet and CoStar)
- Initial tenant screening – credit and background checks
- Property tours
- Handling lease agreements and security deposits
Entrusting these responsibilities to a property manager frees up your time, so you can focus on other aspects of your business.
4. Make the Most of Local Business Networks
Engaging with local business organizations can expand your reach. Build relationships with business owners and professionals who know how to find good tenants. Tap into their insights, expertise, and connections. They may even refer prospective tenants to you.
5. Use Social Media to your Advantage
You can reach a wider audience of potential tenants on social media platforms. Join local business groups and engage with your personal network to connect with potential tenants.
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Platforms suited for commercial real estate promotion:
Interact with followers and respond promptly to inquiries. Being active on social media increases visibility and generates interest. Create engaging content that highlights the benefits and unique aspects of your space.
Here are a few ideas for types of content you can share:
- High-quality visuals
- Success stories of previous tenants
- Updates about the local business community
6. Host an Open House or Property Tour
An open house or property tour gives potential tenants the opportunity to see the space in person.
Virtual tours can also be done. Advertise the event through online listings, social media, and local business networks.
During the tour, highlight the unique aspects of the property. Engage with attendees to understand their specific requirements. Encourage them to ask questions. This face-to-face interaction allows you to build relationships and gauge the level of interest. It’s a great way to identify potential good tenants.
7. Put up a “For Lease” Sign
Don't underestimate the power of a simple "For Lease" sign. Place a professionally designed sign in a prominent location. The sign should clearly show your contact information.
Ensure the sign is well-maintained and visible from the road or sidewalk. This can help generate interest and attract potential tenants already in the area.
Before displaying any signs, check the local regulations on signage, which could include:
- Size and placement restrictions
- Permit requirements
- Prohibited locations
8. List on Commercial Real Estate Portals
Online real estate portals are specifically designed for commercial property listings.
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They attract businesses actively seeking suitable spaces. Some online resources for marketing commercial properties:
- LoopNet
- CoStar
- CommercialSearch
- Realtor.com Commercial
- Zillow Commercial
Make your listing stand out by including:
- Accurate and compelling descriptions
- Professional photographs
- Key details about the property's location, amenities, and accessibility
Regularly update your listings. Prompt responses to inquiries will maximize your chances of attracting good tenants.
9. Word of Mouth
Word of mouth can be a powerful tool for attracting reliable commercial tenants. People tend to value personal recommendations from friends and colleagues.
Encourage your existing network to spread the word about your available space.
To further motivate them, you can offer rent discounts or referral bonuses to anyone who refers a tenant who signs a lease.
Additionally, use your personal networks to reach business owners and professionals who might be looking for commercial space.
You are likely to attract good quality tenants through word of mouth, because it carries a level of trust and credibility.
10. Create a Property Website
Creating a website for your property listings can make it easier for potential tenants to learn more about them. You can make use of user-friendly website builders like Wix or Squarespace to create a professional-looking website. Optimize the website for search engines to increase its visibility.
Be sure to include:
- High-quality photographs
- Detailed descriptions
- Floor plans
- Contact information
A property website adds credibility and allows you to include extra resources such as virtual tours or testimonials.
Building a website can be time-consuming, but the increased online visibility will be worth it.
11. Take Out a Newspaper Ad or Trade Publication Listing
Target specific demographics through ads in local newspapers or trade publications. These mediums still reach a substantial audience, especially businesses and professionals searching for commercial space.
Research the best times to place ads in your target publications. Consider seasonal trends and industry events when you’re planning your ad placement.
Craft a concise and compelling ad that:
- Highlights the key features and benefits of your property
- Includes contact information
- Directs readers to your property listing or website for more details
A well-placed listing at the right time can attract the attention of serious and qualified tenants.
Streamlining Tenant Selection
Once you have found potential tenants, streamlining the final tenant selection process makes everything easier. Here are some strategies to help you:
- Use a standardized and preferably online rental application form. Collect, review, and compare all the necessary information from potential tenants.
- Create a tenant screening checklist to ensure a smooth screening process. Establish clear selection criteria: credit score thresholds, income-to-rent ratios, prior eviction policies, and so on.
- Conduct comprehensive credit and background checks.
- Use digital document management systems to streamline the collection and organization of documents. This will ensure accuracy and accessibility during the selection process.
- Maintain effective communication with potential tenants throughout the process.
Final Thoughts on How to Find Good Tenants
Understanding how to find good tenants is crucial to reaping the benefits of your commercial real estate investment. Using the strategies discussed here can greatly increase your chances of finding (and keeping) great ones. Use the services of professional property managers or tools to streamline the tenant selection process.
It is also important to continuously review and refine your strategies based on market trends and tenant feedback. This will help you keep your tenants happy and ensure you continued CRE success.
