A great leasing portfolio accelerates business growth. However, with a mix of critical dates, projects, documents and key data to consider, managing one is anything but simple. 

Here are four tips to help you minimise your risks, reduce costs and help realign your leased property portfolio with your business requirements and long-term objectives. 

1. Get the lay of the land

Ensure you're on top of the finer details of every lease, not just the lease expiry and the option term. Stay aware of landlord traps that can catch tenants out and lead to complications by considering:

• When you're required to exercise options - Landlords can use impending deadlines to pressure tenants into exercising options or signing new leases. Staying on top of these will allow you to explore suitable market alternatives or find comparable market options to increase your negotiation leverage.
• Market rent reviews - Rent review clauses often provide landlords with a relatively large window of opportunity to issue market rent review notices. And this can happen before or after the review date. That means landlords can keep a close eye on market changes and only issue notices when it will lead to the best rental outcome for them. On the flip side, commercial tenants usually have a relatively small window to respond to the new rental amount. By default, if a tenant does not respond within the allocated time frame or does not respond at all, it’s taken as a ‘tacit acceptance' of the landlord’s proposed rate.
• Whether rent increases on the invoices are in line with your lease - For instance, if the lease says a 3.25% increase but the landlord applies 4% on the invoice, you’ll be paying more than you should. 
• Outgoings and additional costs: Beyond rent, leases often include terms regarding commercial outgoings, which are additional costs related to the property:
  • Gross Lease: When it comes to gross leases, the rent covers all building-related expenses. So, if your lease is gross, ensure that no additional building costs are being passed on to you.
  • Net or semi-gross leases: In the case of net or semi-gross leases, tenants and landlords share building costs. That means outgoings are payable on top of the rent and will increase over the lease term. Be sure that the split of these costs mirrors the terms outlined in your lease. You can learn more about this here.
• Who is responsible for carrying out and paying for repair works - Repairs and maintenance (like cleaning) often sit with the tenant. But the landlord should be responsible for fixing structural problems and repairs/maintenance to capital items, such as air conditioning systems. Be clear on who is responsible for what at each of your sites.

Our tip: Take a detailed look at your entire property portfolio; map out lease expiries, notice periods and renewal options and other important details for each site.

2. Keep in mind that the market will dictate when you need to act

If one of your sites has an upcoming lease expiry, give yourself enough time to canvass the market for more competitively priced spaces that you could relocate to or leverage in your negotiations. 

The amount of time you need for this exercise will rely heavily on the market and size of the asset/project. As a rule of thumb, leave at least one year to explore the market and decide whether it's best to stay at your existing premises or relocate. However, in a relatively tight market (e.g. the industrial market) where options are limited, you'll need to act earlier than in a soft market (like the one office tenants are in now). 

3. Adapt your strategy for each site, depending on who you are talking to 

Remember that no landlord is the same. Each will have a different portfolio, expectations and objectives. 

For instance, a "mum and dad" landlord located in a regional area is likely to have a small commercial real estate portfolio. They’ll usually look for commercial tenants who will respect their investment and offer longevity.

These types of landlords are typically straightforward, easy to work with and more flexible, a stark contrast to corporate landlords in major cities who are strong negotiators and looking to maximise their property value.

So, be sure to adapt your strategy according to each site and landlord.

4. Enlist the help of a professional 

When it comes to managing your commercial leasing portfolio, working with a professional will support timely decision-making ahead of critical dates. At Tenant CS, we represent commercial tenants and not landlords. As tenant reps, we know the market like the back of our hand and offer years of experience in strategic negotiations. That means we can manage your commercial leasing portfolio, analysing each site to provide you with a ‘snapshot’ of:

• Each location’s condition
• Operating costs
• Lease terms
• Space utilisation 
• Additional risks 

Whatever your business objectives, we’ll work with you to determine the best strategy for each of your sites site and strengthen your portfolio.

Book a call with our team today!