The document discusses how commercial real estate owners can improve tenant retention and unlock revenue potential by focusing on tenant experience. It outlines how the industry is shifting to prioritize digital services and tenant needs, and provides strategies like conducting tenant surveys, implementing new amenities, leveraging data insights, and partnering with technology companies to better understand tenants and their requirements to improve the tenant experience and retention rates. Adapting to modern tenant expectations and using technology to gain more visibility into risks and opportunities can help commercial real estate owners see returns on their retention investments over time.
The New ROI: Unlock Revenue by Improving Tenant Retention
1. The New ROI:
Unlock the Revenue Potential
of Your Tenant Base
MICHAEL COCHRAN
Product Strategist
2. 1. A CHANGING INDUSTRY
Two shifts in commercial real estate.
2. WHY IT MATTERS
Why tenant retention matters for your business.
3. THE NEW ROI: RETENTION
Collect and leverage valuable insights to improve retention.
Today’s Agenda
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You’ll learn how to understand your tenant’s
needs and deliver an experience that will
improve retention, stabilize occupancy and
drive more revenue.
9. Tenants’ priorities are changing
What
employees
want,
tenants need,
and landlords
must deliver.
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Tenants
must keep
employees
happy and
productive.
Tenants are
in a war for
talent.
10. New tenants are expensive
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Acquiring a new
customer can be 5-25x
more expensive than
retaining an existing one.
Harvard Business Review Bain & Company
Increasing customer
retention by 5% can
increase profits by
25-95%.
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Your building is only as valuable as the
tenants willing to work there.
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Tenant Risk & Retention Performance
Look at retention performance to know what
works and what doesn’t.
14. You can’t improve tenant retention without knowing what your actual tenant retention has been.
● Where in your portfolio are you have trouble retaining tenants?
● Is low retention in line with an asset repositioning strategy or are you losing good tenants you should not be?
● Based on actual tenant retention rates, what is the likelihood of a tenant renewing in the future?
Tracking Retention
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15. Maintain a competitive analysis with your leasing teams to understand your asset strengths and market weaknesses.
● What are the vacancy rates, recent comps and top tenant expirations of your competitive set?
● If you’re losing tenants, what are competitors doing to lure tenants away?
● How can you improve?
● Are these improvements in line with your overall asset repositioning strategy?
● Keep an eye on coworking companies to see how they are offering flexibility, services and amenities to redefine the
tenant experience.
Run Competitive Analysis
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16. Measuring near term expiration risk is obviously critical to determine where to focus your time between retaining expiring
leases or finding new tenants to replace them.
● What top leases are you at risk of losing?
● How does their rent compare to market?
● Do you even want to renew them?
● What industries and large parent companies are you at risk of losing?
● Who can you not afford to lose and what would happen to your bottom line if you did?
● What is the health of your anchor tenants?
Lease Expiration Risk
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17. A happy tenant is a happy landlord.
Turn upcoming risk into opportunity with
better relationships.
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18. Take an interest in each tenant’s business and stay in touch regularly, not just when they have a problem or it’s time to
renew.
● Establish a consistent schedule for communication.
● Leverage emails, video conferences, office visits and newsletters.
● Don’t underestimate the value of informal conversation.
● Address smaller issues before they become larger fires.
● Document these discussions.
Consistent Tenant Communication
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19. Create Tenant Profiles
Collaborate across finance, leasing and property management throughout the lease to keep information accurate.
● Start with the basics such as the tenant’s business, contact info, critical lease dates and the likelihood of renewal with
any active negotiations.
● Add ongoing credit analysis and growth projections.
● Document these discussions, including overall sentiment and strategic discussions.
● Connect everyone in your company to these profiles for any possible opportunities elsewhere in your portfolio.
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20. Gain more actionable feedback from your tenants.
● Leverage tenant satisfaction surveys, tenant advisory committees and exit interviews.
● Collect insights on what you’re doing right and what you could do better.
● Inform participants of results and close the loop on any follow-ups.
● If tenants feel unheard, or like you’re not acting on their feedback, you can bet satisfaction will drop.
Surveys, Committees & Exit Interviews
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22. — Henry Ford
“If I had asked people what they
wanted, they would have said
faster horses.”
23. Amenities & Services
Take your 3-5% structural vacancy that never gets leased up and try new things beyond putting TVs in elevators, a gym in
the basement and a shoe shine in the lobby.
● Create coworking space for 1:1s, shooting pool or grabbing a cold brew.
● Food halls keep your tenants in the building and create a neighborhood destination.
● Movie nights and live concerts in common outdoor space and public courtyards build your brand in the community.
● Offer concierge services for travel, dining and entertainment options.
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24. Partner with technology and workplace companies focused on tenant experience to make tenants’ lives, and yours, better.
Leverage Technology
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25. Everything we’ve covered so far can help beyond just retaining good tenants, but expanding them and attracting new ones
as well.
● Make tenant experience the focal point of design and marketing for new developments.
● When making capital decisions, measuring how improvements have impacted retention at other assets can help inform
how to invest.
● Partner with existing tenants to invest in new markets, minimizing the risk on both sides.
● The more satisfied your tenants are, the more likely they are to expand their relationship with you. Internal awareness
will help get those deals done faster.
Leverage Insights Across the Funnel
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26. In practice: Rainier Realty
Randy implemented key changes before the renewal conversation, driving customer
satisfaction and ultimately leading to tenant expansion.
● Randy was losing financial and legal tenants.
● Through exit interviews, he discovered that new creative and tech tenants made
the corporate crowd feel less at home.
● He embraced this unexpected repositioning and capitalized on the opportunity.
● He set up a tenant advisory committee to learn what would drive more
satisfaction for his creative and tech tenants.
● Randy took action immediately on the critical issues.
● When it was time to renew, his high-growth tenants actually took even more
space in his building.
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RANDY RAINIER
HEAD OF ASSET MANAGEMENT
27. You won’t see
ROI overnight,
but over time
you will
retain on
investment.
Our Challenge to You—
CLOSING THOUGHTS
Adapt to the
expectations
of modern
tenants.
Technology
can help
increase
visibility into
risks and
opportunities.
28. We’re here to help.
MICHAEL COCHRAN
Email: mc@vts.com