Florida has some great retail markets. There are new businesses popping up all the time. The flurry of retail activity means that the commercial real estate space is active.
With so many options, a landlord can feel pressure to take a lowered rent payment or to charge less to stand out. However, there’s another way to entice business rentals, and it’s all about flexibility.
Allowing for change
Owning a business is an uncertain proposition in the best of times. This means that many business owners are leery of rigid leases. They avoid a lease that locks their company into a space for an extended period of time.
Depending on your own circumstances and the clientele you hope to attract with your property, a little flexibility in these areas can go a long way:
The most obvious place to start may also be the most important. Landlords like the security of a long-term lease. But you also know that an occupied space is more valuable than one that's open.
An out clause that is agreeable to both sides allows a business owner to rent without pressure. Allowing the tenant to recruit a replacement may be helpful. As long they are qualified, it can be an easy way to allow flexibility.
Another option may be to offer a more expensive initial lease with shorter terms. A two-year lease with a higher rate versus a five-year commitment. If you can afford to be flexible, it can go a long way toward recruiting businesses. Companies need to evolve, and the ability to vacate a lease helps.
Depending on what you are leasing, you may want to allow a tenant the chance to expand their lease to include more property after a certain length of time. This allows businesses the ability to grow and spread while keeping their location.
It’s not feasible for all buildings, but if you have the flexibility it can be a great tool. Advertising expansion options can attract young businesses that are looking to grow in time. This can be a win-win, as you fill extra rental spaces and a business can expand to reach more customers.
Businesses just getting off the ground may need a little time to settle. Cost-delayed rental agreements—where the initial rental fees are instead broken up into a monthly total—can be easier for startup companies.
This isn’t advisable for things like the security deposit, but it can be helpful to new businesses for fees like utilities and maintenance. Creating a grace period can give a new business the leeway it needs to get off the ground.
While not all landlords can afford to do this, if you are able it can help your business property stand out in a crowded Florida real estate market.
Creating good situations for both parties
A little flexibility on your end can create positive situations for both parties. It can help a business thrive by catering to its specific needs. At the same time, it allows you to fill spaces more quickly than if you stuck to the same lease for each property.
A knowledgeable real estate attorney can help you review your lease agreements and pinpoint areas where flexibility may be possible.