Office tenant retention is more important than ever. Companies are in the midst of adjusting to a new normal, developing hybrid work policies, and looking for ways to attract employees back to the office. A big component of their process includes using their physical office space as part of their back-to-the-office incentive. To be successful, office property owners must have a strategy in place to attract and retain tenants in their buildings.
In this article, we’ll focus on tenant retention to create a solid foundation for tenant attraction. More importantly, tenant retention and efficient leasing processes are essential to maximizing your return on investment and net yield is the name of the game. High tenant turnover is costly, disruptive, and can seed doubt into existing and potential future tenants.
As a commercial and medical office leasing and sales specialist in the Tampa area for more than 15 years, I’ve seen the difference between office buildings that have a streamlined and professional office leasing strategy in place and those that don’t.
To minimize your churn rate and maintain your office property at a robust lease level, here are my top 10 tenant retention strategies.
1. Deliver Exceptional Customer Service
Tenants are customers who have chosen to temporarily purchase your service offering of the use of your property. To optimize your customer retention, you must optimize your customer service.
- Maintain open lines of communication and respond promptly to tenant inquiries and concerns.
- Ensure that tenants feel valued and that their needs are a top priority.
- Keep tenants informed about any planned property improvements, construction, or maintenance that might cause disruptions to their day-to-day use of the building and business operations.
- Be proactive in addressing tenant concerns and complaints, striving for quick resolutions.
- Keep tenants informed of any property developments or changes.
- Regularly solicit feedback from tenants through surveys and meetings to understand their evolving needs and preferences.
- Implement property management software to streamline communication and provide tenants with online access to services and resources.
2. Keep the Property Well-Maintained
Keeping your office property well-maintained is essential. If you’ve ever walked into a disheveled or dirty store or office, you know that your first instinct is to turn around and head back out, or at the very least, never return. In addition, you doubt the quality of the service or product, and the credibility of their professionalism.
If you want your tenants to take pride in the building, start by demonstrating pride in your building.
- Keep the property well-maintained and aesthetically pleasing. This includes common areas, landscaping, and building exteriors. You would be surprised at how a small investment can have a big impact on your property. Speak with your landscaper to see what changes can be made within your budget to improve the appearance and experience of the building. Look for low-maintenance solutions and native plants to minimize frequent replacement.
- Create a system to promptly address maintenance requests to ensure a comfortable working environment for tenants.
- Regularly peruse bathrooms and your property grounds to ensure the property is clean and in working order. If you are a remote owner, engage a local property manager to be your eyes and ears.
- Regularly check to see if your property could benefit from a paint job, pressure cleaning, tree pruning, etc.
3. Upgrade Your Amenities and Facilities
More employers are seeking on-site amenities to include in their back-to-the-office incentive packages. Contrary to popular belief, upgrading your amenities doesn’t have to be expensive.
- If possible, provide on-site amenities such as a fitness center, meditation space, communal working spaces, and food services. Get creative. A meditation garden could be as easy as adding a bench and some plants to a tucked-away area of your property. Communal working spaces can be created by adding tables and chairs to open areas. Food services can include innovative vending machines or inviting food trucks to your property.
- Ensure that the property is equipped with modern technology and energy-efficient systems.
4. Maximize Security and Safety
Keeping your building safe and secure is as important for your protection as it is for that of your tenants.
- Keep your property well-lit, especially the parking lot.
- Maintain a secure environment with well-monitored access control and security measures.
- Conduct regular safety assessments and drills to reassure tenants.
- Add security cameras and/or monitoring to your property.
- Walk your property to check for loose pavers, lifted sidewalk slates, low overhangs, dark zones, etc., and take measures to correct them.
5. Create Community and Engagement in Your Building
Your office building isn’t only part of a local community, it is a community in and of itself. Make your community a lively, business-fostering, and engaged place that your tenants and local community love and benefit from.
- Organize events and activities to foster a sense of community among tenants. This could be as easy as offering coffee and bagels in a common area once a month or allowing tenants to plant an herb garden.
- Encourage collaboration and networking among businesses within the property. Businesses could take turns hosting a quarterly networking event in the common area or in their offices.
- Recognize and appreciate long-term tenants with loyalty programs, discounts, or small gestures like holiday gifts.
- Make your property available for local community events, Food Truck Fridays, or a gathering spot for a favorite charity. Be sure to check your insurance coverage and/or consult your insurance representative.
6. Streamline Lease Renewals
Make sure your lease renewal process is part of a well-oiled leasing system that includes attracting and retaining tenants.
- Engage a successful and proven local office leasing agent to manage your leasing and renewals on a long-term basis. They will get to know your property, the immediate surrounding area, and the nuances of your requirements and building. In addition, they will be more motivated to partner with you to deliver excellent customer service.
- Simplify the lease renewal process and ensure that tenants are aware of upcoming deadlines.
- Consider offering early renewal incentives.
- Provide lease renewal options well in advance to allow tenants to plan.
7. Offer Financial Flexibility
If we learned anything from the pandemic is that anything can happen, including the unimagined and unexpected. Your tenants aren’t only your customers, they’re also your tenants. They provide the capital that contributes to your yield. Treat them like partners and you will exponentially improve your retention rate.
Be open to discussing financial solutions with tenants who may face difficulties, such as deferred rent payments during challenging economic times.
Incorporating these tenant retention strategies will enhance tenant retention and your NOI. Contact me for more information and long-term leasing solutions for your professional, medical, or flex office building.