Meeting Tenants Face-to-Face Saves Atlanta Commercial Property Owners Capital and Headaches
The office building in question is a 121,000 square foot office building located in suburban Atlanta, Georgia. When Allegiancy took over the asset management of the property, it was in turmoil due to the uncertainties that surrounded the DBSI bankruptcy as well as the softness in the suburban Atlanta Real Estate Market.
The turmoil brought on by the DBSI bankruptcy was caused by several factors:
- By the time Allegiancy took over in February 2009, the property had been neglected for at least six months resulting in deferred maintenance items, dissatisfaction, and anger on the part of tenants and confusion and uncertainty on the part of the property manager.
- The rejection of the DBSI master lease gave many tenants the idea that they could renegotiate their lease obligations.
The Allegiancy team jumped into the fray on day 1. We met personally with each and every tenant. Our face-to-face approach convinced the tenancy that the property was in good hands, that ownership cared about the property and about the tenants. As such, we were able to successfully negotiate with all the existing tenants and avoid the rental rate reductions, the free rent, and the shortened lease terms that plagued many other DBSI assets at this time.
What this should point out to anyone in the real estate business is that there is no substitute for the face-to-face meeting. Your management team needs to be on the ground and they need to know their tenants personally.
Urgent vs Important
While this is simple, it is not easy to get your team to actually do what is necessary—it takes time, it is inconvenient, everyone is busy—it is the age-old ‘urgent versus important’ story. Face to face time is very important but often gets trumped by issues that seem more urgent. To many it is hard to quantify the value of the time it takes to build and maintain these relationships, however, the absence of the personal touch and lack of face-to-face time may result in the situation becoming urgent.
Then it is too late!
In the case discussed above, the ownership of the property was saved tens of thousands of dollars in legal fees to fight tenant defections due to the master lease rejection. The ownership saved even more by not having to give away free rent and the like. Finally, the attention and concern shown to the tenancy gave them confidence in the property and helped dramatically in our future leasing efforts—Allegiancy was able to lease over 30,000 square feet of new space over the next eight months in a market with a 20% vacancy rate! Although hard to quantify, the value is there.
“WE ARE FOREMOST ADVOCATES FOR THE OWNERS.” -CHRIS SADLER | PRINCIPAL
If you own a property in jeopardy, you need someone with a successful track record. All of your stakeholders must have confidence in an experienced asset manager. That’s Allegiancy. Call Allegiancy today, and we will start executing on a plan to add value to your property.
CALL US 1-866-842-7545
10710 Midlothian Turnpike, Ste 202, Richmond, VA 23235