Top 10 Reasons Long-Term Leases are Good for Landlords
- They reduce the potential of ‘void’ periods between tenants
- Extended vacancy or frequent tenant turnovers are expensive and can create unfavorable market perceptions
- Long-term leases reduce the risk of getting an undesirable, marginal credit tenant – if you’ve got a good one, keep it!
- You already have an established relationship with your current tenant and both of you understand the expectations you have of each other
- There will be less credit and reference checks to perform
- The fewer times furniture / fixtures are moved in and out of a property, the less likely there is to be wear and tear or minor damage to door frames, carpeting / floors and paintwork =less replacement costs
- Parking – everyone in the building are used to their ‘standard’ parking spot; if new tenants move in, they may disrupt the whole continuity of it
- Reduces the landlords cost of capital required for new tenants
- Asset pricing is a function of the quality, quantity and durability of cash flows. Longer leases = more stability (assuming a credit-worthy tenant) = less risk = higher price
- You don’t have to constantly make sure your Google Places or other online directories for your building is up-to-date
Coldwell Banker Commercial® professionals specialize in stabilizing rent rolls and are skilled at negotiating longer term leases. Find an advisor today.
By John Boyer, Director of Marketing, Coldwell Banker Commercial Affiliates
