Commercial Property Management

Deciding Whether to Lease or Sublease Your Commercial Space

Posted on February 4, 2012

When searching for the right office space for your business, you may be deciding whether it is best to lease or sublease your commercial space. While there are pros and cons to both, the right choice ultimately depends on your unique business needs. There are many variables that should be factored into this decision, and having all of the facts at your disposal will help you to make an informed choice.

Consider the Long Term Viability of Your Business

The amount of time you expect to stay in your current location has a bearing on whether you should take on a commercial lease or sublease your space. For a commercial business such as a retail store, salon, fitness center or bakery, it may be advantageous to secure your space with long-term commercial lease as the primary lessor. This will allow you to lock in your rate over a longer period of time and enjoy greater profits when your sales increase.

If, however, you are likely to move within five to ten years, are a seasonal business or anticipate needing a larger space in the future, subleasing may be right for your business. In addition, if you are opening a new company, you may consider subleasing to test the market for your product or service without locking yourself into long term contracts. Seasonal businesses may find that subleasing space from a larger, more established business is more cost effective.

Subleasing Office Space vs. Leasing

Some of the main businesses that take advantage of subleased space are businesses that need office space. These businesses often sublease a portion of a larger office, taking advantage of reduced rent and utilities, shared facilities and access to technology. Subleasing office space also means that you will have the flexibility to move without penalty if your current space is not working for your business. With subleased office space, there are no long-term contracts, lower commercial rent rates and increased flexibility.

Older more established businesses may find leasing office space more suitable than subleasing for a number of reasons. If your company has been in business for years, you may want the stability of being recognized at a certain location over time, which adds to your credibility. You may want to appear stable, consistent and stronger than your more temporary counterparts. In addition, you may be able to take advantage of better deals on longer leases and lock in low rates, even if the value of your leased property rises.

Like any other business deal, the decision to lease or sublease must be made with careful consideration. Factor in the pros and cons of either leasing or subleasing and consider your company's long-term needs when choosing what option is best for your business.

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Why Cold Calling Is So Hard for Some Salespeople and How to Fix It

Posted on January 28, 2012

When it comes to your career in commercial and retail real estate you will have to cold call prospect if you want reasonable levels of success in sales and leasing. The telephone is (or should be) your friend when it comes to business generation. It will help you with prospects and listings.

So why is it that so many salespeople do not make the calls on a daily basis? These are the ten most common reasons:

  1. Lack of planning the call times into their diary
  2. Not knowing who to call each day
  3. Not creating a database to support the call process.
  4. Not knowing why they are calling
  5. Not knowing what to say when they make the call
  6. A poor call follow-up system
  7. Call reluctance and avoidance
  8. Not enough time
  9. Not enough practice in the process
  10. Want to do something else

It is a fact that the best people in the industry have two distinct skills or advantages over everyone else. They make the prospecting calls every day, and they have a database that they personally maintain with records of calls and contacts.

If you want to really create opportunity in your career in the property industry, then a call prospecting program is the only way to go. Nothing can replace it as a high level business generation tool.

Here are some tips to take charge of your real estate prospecting processes using the telephone.

  • Determine the exact territory you want business from
  • Understand the ideal property type that you should be listing
  • Get details of all properties in your area and the sales results over the last 2 years
  • Drive around your territory each day on a street by street basis so you can see the local issues and changes that may impact on your prospecting
  • Make a list of all businesses locally that occupy premises either as a tenant or as an owner occupier
  • Set aside 2 or 3 hours a day to make the calls
  • Set some targets for the calls that you make. They should be:
    • Number of calls out - 50 is a good number
    • Number of connections to prospects each day - 20 is achievable
    • Number of appointments made - 2 or 3 per day should be your target
    • Number of listings achieved each week.

Prospecting and cold calling gets easier when you start the process and commit to the calls. Every 100 calls should produce some reasonable opportunity now or in the future. This is a personal discipline that you cannot delegate. Success awaits those that take up and beat the challenge.

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Is the Commercial Property Market Coming Back?

Posted on January 23, 2012

Well, things do look pretty positive in the sunnier portion of the nation's most populous state of California. According to a January 19, 2012 story in the Los Angeles Times, the most recent version of the twice yearly Allen Matkins UCLA Anderson Forecast found that area banking bigwigs and property developers are feeling bullish about the future of commercial real estate in the enormous Southern California area, which includes Santa Barbara, Orange, San Diego, Ventura, Riverside, and San Bernadino counties as well as greater Los Angeles. Can the guys in the welding helmets and hardhats be far behind as new properties start to go up?

Of course, a great deal of caution has to be built into this kind of forecast, which may be based on emotions as much as hard facts about the bottom line, vacancy rates, and other factors. Southern California was hit particularly hard by the 2008 collapse of the United States housing market. Despite recent good economic news, both nationally and in the state, unemployment still hovers at around 11 percent and many of the area's exurban regions, especially Riverside county, are pockmarked with neighborhoods that still bear no small resemblance to ghost towns. Locals may be only to quick grasp on to any shred of good news for dear life.

That being said, Southern California benefits from having a number of prominent local industries that have help up in reasonable fashion since the upheavals of 2008. Entertainment and media have, to be sure, taken a few hits in the Internet age, with music being particularly hard hit. At the same time, movies, television, gaming, and an assortment of ancillary fields continue to move forward despite no small amount of stress as digitalization and the rise of home entertainment continues apace.

There's also no small amount of spill over from Northern California's Silicon Valley, as tech remains powerful in So Cal. Also, more traditional industries -- the kind that require those hard hats and welding helmets we mentioned  -- continue to thrive in places like the enormous and bustling port of Los Angeles/Long Beach.

All of that really does seem to translate into fewer vacancies in California's commercial real estate market. That's likely good news for the entire nation.

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