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Shopping Centre Management - How to Handle Vacancy Factors and Events

Article Source: http://EzineArticles.com/?expert=John_Highman

Like it or not you will get vacancies in your shopping centre. As a shopping centre or leasing manager in the property, it is essential that you minimise the impact of any vacancy and the frequency of vacancies within the property. Careful planning of lease expiries and lease renewals is part of the process.

Higher vacancy factors are sometimes the product of a number of variables such as the following:

• A shift in customer spending patterns and frequency
• A change in the regional and customer demographic
• Poorly matched tenant mix initiatives within the property to optimise retail sales opportunities
• A downturn in the local or regional economy that changes the business sentiment
• The development of a larger property in the same location that attracts tenants away from your property

Facing the facts of a property vacancy and dealing with them professionally in a timely way, will usually minimise the vacancy downtime. You can then keep the income and outgoings following for the landlord at reasonable levels.

Vacancy Control Programme
For this very reason it pays to have a Vacancy Control Programme (VCP) in your retail property. The vacancy control program should be a forward looking program that focuses on the next period of 24 months in the shopping centre. Each month the programme is extended out for the further 24thmonth and strategies are set for the newly identified issues.

The vacancy control programme (VCP) should include these components of control:

1. Identification of the upcoming lease expiries (use a chart for this purpose)
2. Identification of the upcoming rent reviews of all types (use a chart for this purpose)
3. Identification of the lease renewal options with all tenancies
4. Refurbishment programmes required to be undertaken by the tenant under the terms of lease occupancy
5. Refurbishment programmes expected to be undertaken by the landlord
6. Issues of expansion noted with any particular tenancies
7. Issues of contraction required by any tenancies
8. Strategies relating to the clustering of tenants within the tenancy mix
9. Shopping zone optimisation within the tenant mix
10. Make good provisions expected of the tenants and the landlord at time of lease expiry
11. Services and amenities impacted by tenant vacancy
12. Customer shopping patterns and traffic corridors adjacent to vacant tenancies
13. Common area usage patterns adjacent to vacant tenancies
14. Allowances for loss of rental and outgoings during the vacancy downtime
15. Allowances for new lease documentation when suitable tenants are identified
16. Allowances for incentives to be applied in any new lease to be created for the vacancy
17. Rental strategies to be applied with particular tenancies and with any vacancy as it occurs
18. Communication processes to be adopted between the landlord, tenant, and property manager in any new leasing process
19. Plan approval strategies for any new tenancy fit out
20. Decisions regard cosmetic and aesthetic barriers to be applied across a vacant tenancy when and if they occur.
21. Fitout implementation programs given the function of the property and customer visitation
22. Regular status reports to the landlord of issues relating to lease negotiations and vacancy minimisation
23. Strategies to adopt with regard to using other leasing agents in the marketing and leasing of vacant tenancies

These simple processes set the rules for a vacancy control and minimisation. Every retail shopping centre should have a vacancy control programme incorporating these and other factors of decision. In this way the property can be allowed to perform effectively whilst under the pressure of a vacant area.

Ahmed A. Assaf

Excel Commercial Inc, Mortgage Broker

The Realty Company, REALTOR®

Direct (780) 940-5707

Fax 1-866-858-8664

11810 Kingsway Ave, Edmonton, AB T5G 0X5

ahmed@excelcommercial.ca
www.excelcommercial.ca 
www.apartmentadviser.com 
Twitter @ExcelCommercial

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Excel Commercial: Five Benefits of Owning an Investment Property: "There are many benefits to owning an investment property. If you are in the position to do so it can be financially beneficial to choose pro..."

Five Benefits of Owning an Investment Property

There are many benefits to owning an investment property. If you are in the position to do so it can be financially beneficial to choose property investment. Like everything to do with money it is wise to get the right property investment advice, so speak to your financial planner, your mortgage broker and real estate professionals.

1. Capital growth:

Through owning an investment property you will see a long term growth in your capital. Buying a property is usually a long term investment. When you purchase the property it is normal to intend on having that property in your possession for a long period of time. If you purchase land you can increase the value by building a house, and in time both the land and home will increase in value. If you do go to sell the property you are likely to make a decent return on your initial outlay.

2. Minimise tax:

You are able to claim any depreciation on the buildings fixtures or fittings, and if the building is new or bought off the plan then you can claim for the maximum amount. Make sure that the structure of the ownership of the property is considered carefully as this can affect the investment property tax deduction rate. You may own the property yourself, or joint own it with a partner, or it could even be owned by a company. You can also get tax benefits through negative gearing.

3. Renting:

You may choose to rent the property out. There are many benefits to renting a property, the main one being an increase in your cash flow. Your tenants can effectively pay your mortgage for you on the property, with their rent covering some, if not all your mortgage. You even may choose to make additional payments to speed up the process, which in the long run will mean you pay less interest on the loan. It is a good idea to have a real estate agent handle the lease for you, and make sure that the tenants pay bond. Don't accept tenants into your home on a hand shake agreement.

4. Future use:

You may choose, down the track, to move into the investment property yourself. Depending on where you purchase the home, you might decide in the future to use the home as a holiday home. An investment property does not just have to be a residential property in the suburbs. You might buy a beach home, an apartment in the city, a bush block or a rural property. Other types of investment properties can include commercial property, a warehouse, a shop or vacant land.

5. Secure investment

Buying property is considered a more secure investment than some other types of investments, including investing in shares, super funds or investing in a start up business. There is a certain element of risk to all investments but some are more volatile than others. Shares are affected by global financial activity, and the recent global economic downturn has seen many people lose a lot of money on the shares, as well as through their super funds. A new business starting up carries a lot of risk as there are many factors involved in it being successful. There are risks with investing in property, for example your house may burn down, but being a physical asset you have a lot more benefits.

*Article Source: http://EzineArticles.com/?expert=Karl_K_Samuels

At Excel Commercial Inc we strive to provide the best solutions for our clients Commercial Mortgage and Business Loan financing needs as well as residential mortgage and lines of credit for our Self Employed, Business Professional and Real Estate Investor clients.

As your mortgage broker we work for you, our client, and not the lender.

Please contact me directly if you have any questions or require any additional information.

Sincerely,

Ahmed A. Assaf, Broker

Excel Commercial Inc.

Direct (780) 940-5707
Fax 1-866-858-8664

ahmed@excelcommercial.ca

www.excelcommercial.ca

 

Suite 508 Oxford Tower

10235-101 St NW

Edmonton, AB T5J 3E8

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