The Professional Approach to Lease Renewals
No matter what current vacancy factors are in any area, tenants feel they can and should negotiate with the landlord whether they occupy an apartment building, office building or commercial center.
With vacancies high in many rental markets, the tenant will certainly be aware of all the possible terms for a lease renewal. If the owner or manager of the property is inflexible and unwilling to revisit lease terms, tenants know they will have no trouble finding available replacement space in a building nearby. A professional manager is aware that a prolonged lease negotiation can quickly result in a vacancy. In an eagerness not to lose prime tenants, landlords may try to make their offering more attractive by contributing new amenities or higher levels of service than tenants would probably ask for. These promises may not even be necessary. According to surveys of tenants, they place nearly equal weight on three factors when deciding whether to renew their leases:
- The financial terms of the lease
- Location and amenities of the building
- Quality of services and responsiveness of management
When a tenant is satisfied with each of these factors, they are likely to renew the lease. If they are dissatisfied with any of the three factors, they are likely to relocate. If the tenant is not happy with the service quality, cutting the rental rate by a small amount probably will not reverse the decision to leave.
If the building location is good, the lease terms are fair and management is handled well, the tenant usually is not in a hurry to move to another building for just a few simple amenities. Removing a popular amenity, even temporarily, will affect the tenant’s attitude negatively. However, tenants will tolerate the inconvenience and dislocation of a major renovation as long as work proceeds on schedule and is completed when promised.
Good management, at all times, is the most important factor in renewing a lease. A professional property manager keeps the tenants happy by delivering top-notch service to every tenant, month in and month out rather than trying to impress those with expiring leases with amenities and favors. Remember, every lease eventually ends and tenants have long memories.