As part of a comprehensive commercial property management service, you must provide a quality tenant retention program and service. In simple terms, the good tenants of a property should be part of a retention strategy, while the other weak tenants should be part of a replacement strategy.

Here are some topics to help you set up a professional tenant retention plan in a managed commercial or retail property.

1. Review all competing properties in the local area to understand their availability factors and tenant mix profiles. Look for the strengths and weaknesses in each of those properties. Understand how those properties can be related to the function of your property. Could those properties be attractive for your tenants to move into? Make sure you understand this fact.
2. Check out the local municipal council regarding upcoming future real estate developments. Understand if any of these real estate developments could have an impact on the supply and demand relationship of occupied space. If new local real estate developments are coming up, check the timing of the property’s launch and potential rents that could apply to attract new tenants. Expect those properties to also offer great incentives as part of the property release strategy. Those properties could soften the effective market rent due to the incentives offered.
3. Review your existing property for combination of tenancy and lease profiles. Identify leases that are due to expire soon. These will typically be leases that are due to expire within the next two years. Those leases will be an immediate concern as you will need a strategy to handle lease expiration or replacement. Planning and preparation is everything.
4. Divide your leases on your managed property into desirable and undesirable tenants. They are the desirable tenants that you will encourage to remain in the occupancy. You will need a standard set of rents and lease terms to apply as part of the negotiation with existing tenants. You will need to establish market rents that apply to existing tenants. The market rents you choose must be carefully considered with respect to recoverable expenses and property expenses. You can choose gross or net market rents, but in each case, cost recovery must be optimized for the landlord.
5. Unwanted tenants must be identified and monitored as they near the end of their lease. When the lease is less than 12 months from expiration, you’ll need a replacement tenant strategy. That will include target market rent, incentive allocation, owner works, and permitted use.
6. If your property contains one or more primary tenants, pay special attention to the existence of the primary tenant and how they interact with special tenants throughout the property. A productive and proactive anchor tenant will encourage clients to the property and support the rental in general. A good anchor tenant helps the property succeed.

These are some of the issues to consider as part of preparing your tenant retention strategy and tenancy mix plan. The ownership requirements of the landlord’s property must also be considered in balance with the decisions you make regarding leases. The rent of the property will also be established taking into account the prevailing real estate market conditions in the local area.