8 Things to Look for When Evaluating a Commercial Tenant
Not everyone who owns a commercial property is a multi-million dollar corporation with near unlimited resources to evaluate potential tenants and a long track record of leasing similar properties. Here are eight things you may want to consider when evaluating potential commercial tenants:
Creditworthiness: Look for tenants who have a strong credit history and can demonstrate their ability to pay rent on time.
Viable Business: May want to make sure the tenant has somewhat of a viable business. For example, if they are a newspaper startup, you may question their ability to make a profit, let alone sell anything! If a tenant can’t make money, they may have a hard time paying the rent.
Length of lease: Consider tenants who are looking for longer leases, as this can provide more stability for your property.
Use of property: Make sure the tenant's intended use of the property is compatible with your goals for the property and complies with any zoning regulations.
Maintenance and upkeep: Look for tenants who will take good care of the property and handle any necessary repairs and maintenance.
References: Ask for references from previous landlords or business partners to get a sense of the tenant's reputation and reliability.
Insurance: Ensure that the tenant has adequate insurance coverage to protect both themselves and the property.
Communication: Look for tenants who are responsive and easy to communicate with, as this can make the landlord-tenant relationship much smoother.
In our experience, our landlord clients want solid, reliable tenants that will pay the rent, maintain the property so there is no major damage after the lease expires and not be the subject of complaints from nearby neighbors or other tenants.
There are, of course, other things to look out for but this list should give you a good start.
Finding the right commercial tenant can be a stressful situation. If you're looking to lease your commercial property in the Denver metro area, you should speak with a broker that has the competence and track record to help you achieve your goals.