Despite signs of a nationwide slump in the rental market, Denver's star continues to rise. Rents have ticked up consistently throughout 2024 so far, as demand continues to rise amidst low levels of inventory.
This is essential to keep at the top of your mind when it's time for lease negotiations with your existing tenants. The key is to strike the right balance, ensuring you get fair market value for
your property without jeopardizing relationships with your most loyal tenants. With that in mind, here are our expert commercial leasing tips for Denver landlords.
Know Your Market(s)
One crucial piece of Denver real estate advice is to remember that Denver is not a monolith. Different markets command different rates and attract different types of tenants, and this is especially true when it comes to commercial property.
This market is characterized by a mix of office spaces, retail properties, and industrial facilities. Key areas such as Downtown Denver, LoDo (Lower Downtown), and the Denver Tech Center are hot spots for commercial real estate.
Keeping up with market trends, rental rates, and vacancy rates in these areas is crucial for effective lease negotiations.
Prioritize Strong Tenant Relationships
One of the most important office lease negotiation tips we can offer is to prioritize strong relationships with your tenants above all else. This applies to the period before you even begin lease negotiations.
If your commercial tenants are happy with your performance as a landlord, they will be much more agreeable to new terms and rate rises. You should strive for timely, transparent, friendly, and professional communication at all times. If a tenant flags an issue, respond and address that issue promptly.
Remember to offer flexibility in your lease and in any subsequent agreements. Your tenants are vulnerable to economic ups and downs, and your willingness to show flexibility during difficult times will translate to better returns in the long run.
Craft a Win-Win Lease Agreement
Any successful lease agreement guidance should emphasize the importance of aiming for a win-win outcome. Both yourself and the tenant should feel like they have gained something from the new lease.
To get there, you need to understand the needs of your tenants and their own business goals. This way, you can incorporate lease terms that empower, rather than restrict their operations.
Make sure to offer incentives for lease renewal, which can counter the impact of rate rises. Finally, make sure to integrate predictability into any new lease agreement, so that your tenant knows they can stay for the long term if they need to.
Need Help With Your Denver Lease Negotiations?
Lease negotiations are never easy. Striking the right balance between your return on investment and your tenant relationships can be tricky, especially in the current market. If you want Denver lease experts to take care of this process on your behalf, we have got you covered.
At PMI Cedarboldt, we offer extensive, local experience in lease negotiation and administration, to help you and your tenants get the best deal. Reach out today to find out exactly what we can do for you and your portfolio.
