Introduction
Maintaining a high occupancy rate for your commercial properties is key to staying profitable and producing consistent returns. No matter what asset class you service low occupancy for a consistent amount of time will cause major problems with cashflow and with investor returns
Diagnosing issues with occupancy has many different areas to consider. We will be speaking primarily from the standpoint of a CRE marketing company helping to uncover some of the best strategies to increase commercial real estate occupancy rates.
Who This Article is made for
We created this article to address the concerns that CRE owner / operators have around filling their properties with tenants. You could be sitting in a few different situations, your property has been newly built and you are looking to start the lease-up process. You are struggling to gain new leases despite promotional efforts OR you are looking to optimize your current CRE portfolio holdings.
Who The Methods Work For
The methods we lay out in this article will work for all asset classes of commercial real estate big or small. We will provide different examples throughout this article for different use cases to give you a broad understanding of how the methods could be used.
Starts With A Story
Prospects need to know what makes your properties different from others in the area. That all starts with creating a brand story. This story and messaging will be the overall guiding light for all of your other efforts. Without a quality tenant focused story it will be difficult to communicate value as to why someone should lease from you. Below we are going to break down what goes into creating messaging that converts traffic into paying tenants
Create a tenant-first value proposition
To create a tenant first value proposition Look to start with key points such as commute times to major city hubs, property amenities, foot traffic, renovations recently performed, expansion capabilities etc etc. These items will be different for each property type. The core objective is to find features / distinguishing elements that can be used to set your property apart from others.
Example messaging
Multifamily
[Multifamily Property Name] offers [studio/1BR/2BR] residences with [X – X SF] floor plans, [ceiling height] ceilings, and features like [in-unit laundry], [balcony/patio], and [stainless/quartz] finishes. Community amenities include [fitness center], [resident lounge/coworking], [package room], and [garage/EV charging]. Located in [Neighborhood], the property benefits from proximity to [transit/highways], everyday retail, and green space supporting strong renter demand and lifestyle convenience.
Retail
[Property Name] offers [X X SF] retail suites with [XX’] frontage, strong street visibility, and flexible buildouts for [food/service/medical] uses. Features include [venting/grease trap], [outdoor patio], and [loading access]. Positioned near [anchors/transit], the property benefits from [daytime population/residential density] and convenient [parking].
Office
[Building Name] is a Class A office asset offering [total RSF] with [typical floor size] floor plates and [ceiling height] clear heights. Suites support a range of layouts: open office, private offices, as well as collaborative zones. With [window line/deep natural light] and [views]. Office infrastructure includes [fiber providers], modern HVAC, and [backup power/after-hours controls] where available. Building operations feature [24/7 access], on-site management, security, and [elevators/loading]. Located in [submarket], it provides access to [transit/highways], nearby amenities, and a strong profile for client-facing tenants.
Build Leasing-Ready Content That Removes Friction
You should have your promotional materials ready to go. Property one pagers, “suite sheets” or “spec sheets” can be great additions to inform people about your CRE asset (retail, multifamily, office, etc etc.) The more information you can provide for people to make informed decisions the better. Always be sure to include as much processional photography and video as necessary and ensure you are utilizing your firm’s core messaging.
Campaigns That Drive Qualified Tours (Multi-Channel)
Online ads can be a great way to increase commercial real estate occupancy for any property type but only if done correctly using a well planned campaign. The goal with digital advertising is to drive tours not just clicks. This comes down to knowing who your target audience is and knowing how to reach them in a cost effective way. This can be done via paid placement in Google Maps, using paid social OR targeted SEM advertising with keywords.
Many companies who try digital ads go wrong because they do not have a well defined target audience either from failing to target the wrong keywords OR in-market audiences) OR they do not have the budget required to sustain the effort long enough to see real world results.
To stop this from happening ensure you are targeting the right people at the time and that you are leading with messaging that connects with your target audience for your specific property type.
Broker Demand Generation
Commercial real estate brokers can be an excellent source of leads to fill a property. They can assist with demand generation by providing market expertise, finding tenants/buyers, offering strategic guidance to maximize property value, and minimize vacancies.
To improve demand generation with brokers treat them like a persona to market to. Consider adding availability “updates”, deal term highlights, new building upgrades or offering tour incentives. The more information you provide to the brokers the better they will be able to access their network to find potential tenants / buyers.
Improve Conversion: Inquiry → Tour → LOI
Running campaigns without a well defined process is like trying having a cellphone without cell service – essentially useless. Once you get a property inquiry do you have a detailed plan for next steps? Your first step should be to schedule and run a tour. Next you should plan to send out your promotional materials within 1 to 2 hours after meeting. And finally move into the LOI phase. For those users that make it to the final stage “LOI” based retargeting can be implemented to stay in front of the target audience as long as possible until they sign the deal. At the end of the day the most important thing to remember is that you need to stay in contact with them by any means necessary.
Retention Methods – A critical part of the process
Understanding how to Increase CRE occupancy rates is only part of the game. Once you win new leases you will need to ensure you keep your tenants satisfied. This is where retention strategies comes in handy. Retention for CRE can be broken down into 3 core categories. Tenant communications, renewal campaigns and tenant advocacy. We will cover all three below in greater detail.
Tenant communications
The more your tenants hear from you the greater ability you have to build a rapport with them. Engaging in regular tenant communication will help you identify and solve problems before they happen as well as to help reduce your churn rate. Some great ideas for this could be: Quarterly “what’s improving” updates, community events, and staying on top of service responsiveness.
Renewal campaigns
Next, there are renewal campaigns. This form of communication could come in the form of an “early renewal” email, or letter encouraging current tenants to re-lease at your property. Additionally, you can also send out communication for tenants to “upgrade within the building” or reconfiguration options if they need additional space.
Tenant advocacy
People buy from those they know, like and trust, especially online. One of the best ways to gain trust is with reviews. Did you know that 99% of people read reviews when searching for a product or service online? The more reviews you have the better you will be. Strive to gain as many five star reviews as possible. Tenant advocacy can also include “spotlight” content from those willing to share their experience at the property while at the same time helping to promote your firm helping to attract similar people.
Conclusion
Increasing commercial real estate occupancy rates is important to maintaining a healthy cashflow for your portfolio. You do not need to use every method we laid out in this article. Pick a few that work for your firm and stick with those. If you need assistance any of these methods reach out to the Cindtoro team today! We would love to fulfill your needs.
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