Having spent 10 years of my commercial real estate career as Director of Leasing for both a public and a private shopping center investment company directing retail leasing efforts for a combined portfolio of 133 shopping centers across 13 states totaling over 6 million square feet of GLA, I had the pleasure of working with some fantastic retail leasing agents who generated tremendous value through their ability to execute new leases and renewals. Unfortunately, I also worked with some terrible leasing agents who did not have the luxury of learning the business from a good mentor, ignorant to the inefficiencies and frustrations they create for owners, asset managers, property managers, agents, and leasing prospects. Leasing is the most important component to creating value at the property level and the goal of this article is to give retail leasing agents some simple advice from their client, the shopping center owner, in an effort to make you a more effective and productive leasing agent in 2018. I welcome owners and agents to share any shopping center leasing advice you believe may benefit other retail agents.
1. Package every deal with pretty wrapping paper and a big red bow on top. Have you ever received a present still in the plastic bag from the store with the receipt at the bottom? This is the sentiment when a leasing agent forwards a prospect’s proposal to an owner and writes “see attached proposal for your review”. This is the laziest form of brokerage as it is the agent’s job, not the Landlord’s job, to diligently package the deal. Present all the information the Landlord needs to make an informed and calculated decision on whether or not to enter into a long term, contractual relationship with this prospect. Send financials, credit check, tax returns, business plan, operating history, number of locations, landlord reference, nearby competition, recent market comps, and give your honest opinion of the deal and a redline with your proposed counter offer. Every additional request for information the Landlord must make wastes more time and time kills deals. If your goal is to make the asset manager’s life easier, take the time to properly package every deal you present. It will make you stand above the rest.
2. “ABC: Always. Be. Communicating.” Yes, we already know closing is important but it is just as important for retail agents to “always be communicating” with the shopping center owner. Leasing agents should regularly check in with owners to give them leasing updates, market intel, tenant updates, property tours, etc. The simplest way for an agent to build trust and confidence is to always call the owner with an update BEFORE the owner calls you. As Director of Leasing, if I called one of my agents with a question or a request and did not get a response in 24 hours or if I was the one always reaching out for updates and always getting voicemail, the perception is my shopping center is not a priority.
3. You Never Get a Second Chance to Make a First Impression. The leasing agent is typically the first introduction a prospect has to a shopping center. Therefore, landlords want an agent who is professional, responsive, knowledgeable, likable, and genuinely engaging with the prospect. Be enthusiastic when talking to a prospect because its likely the last agent they talked to did not show enthusiasm towards them or their business. If a potential tenant cannot get a return phone call from landlord’s agent he thinks “if I’m a tenant, how long will it take to get a response to a roof leak request or an accounting issue if i can’t even get a return call about a leasing inquiry?”. Agents, remember you are the face of the shopping center and there is a direct correlation between your actions and prospect’s perception of ownership and management.
4. Would You Do This Deal If You Personally Guaranteed the Shopping Center Note? I always ask agents this question when reviewing a deal and believe you get a much more thoughtful response than asking “Do you like the deal?”. Good agents think and act like an owner. Yes you negotiated a good rent but you also agreed to give them an exclusive use clause, a CAM cap, HVAC warranty over the term, reduction in admin and management fees, and you limited the personal guaranty so this deal is not as attractive as you believe. Take the time to understand the Landlord’s lease form and to understand his hot buttons and what items he will not bend on as that will allow you to negotiate from a position of strength from the beginning.
5. “Tell me, how would you describe your credit?” Asking this question of a leasing prospect during your preliminary screening phase is the number one time saver for any Landlord agent. Consider the amount of time an agent may spend on a prospect from initial phone conversation, follow up email, site tour with prospect, follow up tour with prospect’s contractor, to negotiating a good faith LOI… to then discover the prospect has bad credit and this deal never had a chance from day 1. If a prospect hesitates or stumbles or goes into a long explanation when you ask them to describe their credit, you should reconsider how much time you want to invest in this lead.
George Fox is Vice President with Divaris Real Estate and specializes in grocery anchored shopping center leasing and sales in Virginia and North Carolina. Fox develops and executes successful leasing and sales strategies tailored to accomplish his shopping center client’s specific business and investment goals.