No matter what the current vacancy factors are in any area, tenants feel they can negotiate with the landlord, whether in an apartment building, an office building, or commercial center.
With other space available in the local rental market, the tenant will certainly be aware of all the possible terms for a lease renewal. If the owner or manager of the property is inflexible and unreasonable, tenants know they will have no trouble finding available replacement space in a building nearby. A professional manager is aware that a prolonged lease negotiation can quickly result in a vacancy. In an eagerness not to lose prime tenants, landlords may try to sweeten the pot by offering new amenities or higher levels of service than tenants actually would ask for. These promises may not even be necessary.
According to surveys of tenants, they place nearly equal weight on three factors when deciding whether to renew their leases:
• The financial terms of the lease.
• Location and amenities of the building
• Quality of services and management.
When a tenant is satisfied with each of these factors, they are likely to renew the lease.
If they are dissatisfied with any of the three, they are likely to relocate. If the tenant is not happy with the service quality, cutting the rental rate by a small amount probably will not reverse the decision to leave.
If the building location is good, the lease terms are fair, management is handled well, the tenant usually is not in a hurry to move to another building for just a few simple amenities.
Removing a popular amenity, even temporarily, will affect the tenant’s attitude negatively. However, tenants will tolerate the inconvenience and dislocation of a major renovation as long as the work proceeds on schedule and is completed when it was promised. The most important factor in renewing a lease at any time is good management at all times. A professional property manager keeps the tenants happy by delivering top-notch service to every tenant, month in and month out, rather than trying to impress those with expiring leases with amenities and favors. Remember, every lease eventually ends, and tenants have long memories.