If you’re having trouble getting tenant representation brokers to your property you may be considering offering incentives. A landlord might choose to offer an incentive to brokers if their property is in an obscure location or has been sitting vacant for a while, among other circumstances.
These incentives can come in the form of a cash bonus to the broker who brings in a tenant that signs a lease or as gift cards to each broker who brings a client to tour the space. Usually, the goal of these incentives is to increase tour activity and build enthusiasm around a property in hopes of finding a tenant as quickly as possible.
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In this article, we will outline the pros and cons of offering tenant rep incentives to help you decide if this is the right strategy for your property.
What Are Examples of Tenant Rep Incentives?
A tenant rep incentive, or “broker bonus,” can be anything that rewards a broker for bringing their client to a property or for signing a lease at that property.
For example, a landlord may offer brokers a $50 gift card to a restaurant near the property for every tenant they bring to the project.
Another example of an incentive could be a trip for two to any broker who brings in a tenant that signs a lease on a particular space.
When sending out a marketing email for your property, it’s important that your message stands out in the broker’s flooded inbox. A subject line advertising a gift card for every broker who brings a client to tour a property is going to get their attention, making them more likely to read the email.
This eye-catching technique can bring your space to the attention of more brokers, potentially prompting them to include your office in the initial survey of properties presented to their clients.
Incentives also show that the landlord is very eager to make a deal and lease the space. This can also entice a broker to visit the space.
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An effective tenant rep incentive should boost publicity and increase traffic to your property.
This can be especially important if your property has any sort of stigma in the market – say it was dated or had poor access – but something has recently changed or been improved. It can be important to incentivize brokers to visit your property to see these improvements and remove the stigma in the market.
Ideally, this increased traffic will bring the right client into the space and result in a lease being signed.
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Remember, it is a tenant rep broker’s job to find their clients the best possible options on the market to suit their needs. That means that if your property is truly a good fit, the broker should already be including it on their market surveys.
One of the main goals for tenant rep brokers is to gain and keep the trust of their clients. This means they will only show them the properties that they truly believe fit their needs. Their client’s future business is much more valuable than a gift card.
Because of this, it’s possible that you’re spending money on finding the same tenant that would end up occupying the space anyway.
An effective tenant rep broker incentive is likely to be costly. It might be worth evaluating if the money spent on the incentive could be dedicated to small improvements to the property, such as fresh paint or new carpet.
If these improvements rival the cost of the tenant rep incentive, then it might be worth foregoing the strategy in order to create a space that incentivizes clients to lease the property.
The decision of whether or not to use a broker bonus is ultimately dependent on the space you’re marketing. If you feel that your space is being looked over by brokers, then it might be worth it for you to create an eye-catching offer.
If you’re considering employing an incentive to bring broker attention to your property, your leasing broker should be able to help you decide if this makes sense for your project or not.
Looking for other ways to bring attention to your property? Check out these articles:
- Broker Events for Property Marketing: Pros and Cons
- Best Examples of Commercial Real Estate Video Marketing
- What Are Spec Suites? (Definition, Pros, and Cons for Tenants)
- How Much Does It Cost to “White Box” Commercial Space? (With Definition & Benefits)