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Commercial real estate landlords differ from their residential counterparts in that they can be much more picky in who they rent to.
This isn’t necessarily a reflection of discrimination toward any type of tenant, however.
Landlords need to understand or at least reasonably believe a tenant has a good business plan. Some will ask to scrutinize earnings projections and ask for greater security if they are not convinced.
It is part of a broker’s job to assist the tenant in presenting their business opportunity in the best light. I will often ask for a copy of business plans provided to financiers, as that is a language many landlords can identify with.
In instances where the tenant may already exist in another location, I will encourage the landlord to pop in and see the business in action.
Simply asking a landlord to blindly believe in a tenant’s vision can be leaving too much assumption at the table.
Ghosts of tenant past
You can safely assume landlords have seen it all and heard every excuse.
We all have a history and landlords bring their past tenant relationships into a lot of their decision making. Interactions with those tenancies may have impacted a landlord’s opinion of similar businesses, be it fair or not.
They will certainly have less enthusiasm for the same use if he or she has any sour taste for a specific type of retailer.
My best advice to tenants is to present their best foot forward and provide any positive information they can about the business before any questions come up.
Tenants need to be prepared to explain knowledgeably why their concept is different than others that may have failed before them.
Tenants should showcase why their business is unique, providing as much information as possible regarding the appropriate planning and funding in place.
It’s a jungle out there
I have not been shy about my love of dogs and I suppose most other animals are fine, too. There are many landlords, however, that would not share that opinion.
Animal-based businesses are some of the hardest tenants to place.
I recommend to these tenants that they address any issues a landlord may typically have ahead of being asked for them. Odour, noise and neighbouring tenants are items that come up often in animal-related industries.
If a tenant is able to present their plan pre-emptively addressing these concerns, it can demonstrate not only that they’re cognizant of them but that they don’t want to create more.
The landlord is left holding the proverbial bag, after all.
He or she cannot sacrifice the comfort of other tenants to fill a vacancy; the best tenant is the tenant they already have.
It can seem discouraging, even as a broker, to be turned down based on use of property.
Outside of building a rock-solid plan, I can only advise that patience is often required.
There is a space for everyone, even if it’s not here today.
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