2013 Spring
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COMMERCIAL REAL ESTATE<br />
Landlords need to find good commercial tenants<br />
to compliment their investment property and<br />
provide reliable returns on their investment<br />
Landlords need to take a long term view<br />
of where they want their investment property<br />
to be positioned as a desirable location for<br />
tenants to occupy and do business. Landlords<br />
need to find tenants that can run successful<br />
businesses and demonstrate the desirability<br />
of occupying their property and attract other<br />
robust and profitable tenants who are able<br />
to pay the rent.<br />
Commercial leases usually create lengthy<br />
terms of occupation and the landlord<br />
has to plan a strategy which provides<br />
an harmonious tenancy mix, competitive<br />
lease covenants providing for rental growth<br />
and the opportunity for capital growth.<br />
Tenant mix<br />
The right anchor tenant will attract<br />
a complimentary mix of tenants which should<br />
have the right fit with other minor tenancies<br />
in the building. Anchor tenants usually<br />
require exclusivity of use as part of the lease<br />
negotiation process.<br />
Buildings without anchor tenants require<br />
the landlord to seek out complementary<br />
tenancies which in some cases can compete<br />
22<br />
for particular patronage. A good example<br />
of this is the fast food industry where outlets<br />
of popular brands such as McDonalds,<br />
KFC and Dominos co exist profitably and<br />
become a sought after centre for fast food<br />
in the locale.<br />
Rents<br />
The current commercial market, particularly<br />
on the lower north shore, has been largely<br />
driven by a rash of company downsizing<br />
and economy measures. Today’s tenants<br />
are well aware of the regime of incentives<br />
being almost universally offered by landlords<br />
to attract tenants. Landlords need to know the<br />
marketplace and set an achievable balance<br />
of rental income versus incentives to get<br />
a result which is beneficial to both parties.<br />
Presentation<br />
Improvement to the presentation<br />
of commercial space is one really positive way<br />
improving the desirability of the premises<br />
to potential tenants. We recently leased<br />
space to a prominent architectural firm who<br />
were given the opportunity of input into the<br />
make good of the outgoing tenant and the<br />
design of the reception area to create an ideal
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