Newly Acquired C-Building 60% Occupied - Rates Under Market - Whats the Proper Way to Increase Rates
I'm new to CRE but I'm going to make the best of my first acquisition. 

As the title states, I have good tenants which have been in the building for quite some time, over 5yrs.

At the end of Feb all of them will have had their leases expired, I've owned it for 4 months now with no sudden changes to keep stability amongst the tenants. Currently rent roll is at $36k/month with plenty of lease up opportunities. Goal is to be at +70k a month before year end via new leases at market rates and bumping up current tenants DELICATELY.

1. I'd like to hear about how others have approached their acquisitions in terms of renewing leases, and adjusting rates to the current norm we live in. Prior landlord was a very well experienced CRE veteran with many big deals under his belt.

A. The market rates with comparables are at $27-29/ft, my current tenants are at $15/ft that will eventually go on a month to month.

B. My monthly expenses including mortgage, utilities, expenses, and taxes are approx $32k.

C. I haven't used any brokers yet bc I wanted to lease out the small individual &lt; 200 sft offices on my own. The bigger suites will be marketed towards larger anchor tenants at market rates.

How do I tackle current tenants with increases and lease renewals?

Thanks in advance
[{"id": "ht4he0n", "text": "Get the broker now. You only have one chance at a first impression to the market and having an experienced broker on board will improve that versus you marketing it yourself and stumbling through your first deal.", "replies": [{"id": "ht4k2qo", "text": "The last 7 leases I did on my own, and I was able to structure them very well and above what the prior landlord had for the same spaces. I added approx $7k since I acquired it. 6 spaces are small offices 150 sft. The largest soace was 1140 sft/ $28.50.\n\nI agree with your statement. Should I improve the spaces first or wait for the portential tenant to suggest recommendations?\n\nWhats the rationale of using the broker to renew leases?", "replies": [{"id": "ht4ky6c", "text": "The rationale is to have someone experienced in negotiating leases working in your behalf to negotiate these leases. If you are comfortable doing it, by all means it\u2019s your property and that\u2019s your prerogative. How do you know what rates you are charging are market? Maybe the broker will have a better sense of market comps and could have convinced the tenants to pay more. \n\nI\u2019d say the question on improving the space before a tenant is committed or as part of a TI project once you get a tenant is highly dependent on the condition of the space now and the market. If the space looks decent and the market is hot, maybe you don\u2019t have to do much to market it. If the space is trashed and the market for this type of property is flooded with options, you\u2019ll have to do something to compete.", "replies": [{"id": "ht4mgrj", "text": "This makes sense and I understand how the broker could add value and create a disconnect bw tenant/owner.\n\nI'm in my 30s, all of my tenants are older and preprogrammed to pay below market for year due to prior landlord. They're all impressed and thrilled that I bought it. But at the same time no I have to deliver before asking market rates.\n\nHow did I determine market rates? Easy.\n\nI was the tenant in the building for 5y and watched how it was mismanaged daily. Absentee PM and ownership was the first thing I changed. \n\nI'm the PM, leasing manager, all of the above. I learned everything about the old structure and devised a game plan or a \"feel\" for the building. \n\nNext I knew my sub-market. I knew the other buildings near the vibrant area I bought in. Then I priced out competition. Walked through their buildings. Studied their tenants. While their leasing managers toured me, I noted rates, square footage, lease terms, what they billed for, and then applied my own mathematics.\n\nI knew the buying needed to generate approx 70k/month or 850k/yr in top line revenues asap. So I started leasing out the small spaces forst on my own. Now the bigger spaces are a different issue.\n\nI also have a nationwide tenant whose lease expires in July and major agent with a major brokerage is taking his sweet time to communicate with the tenant. The renewal is for 5yrs but with significant TI and a marginal bump in rent. I'm confused on whether or not to call the tenant my self and be more proactive.", "replies": [{"id": "ht4oawc", "text": "If they are below market and getting a deal with lots of TI do you really want to lock them in for 5 years at only a marginal rent bump?\n\n I think the general sluggishness of the tenant broker is an indication of what having your own broker could help with. If that tenant broker is getting pressure from you, who they don\u2019t know and probably thinks they will only do this one deal with, then they might not feel like they need to act immediately. On the other hand if they get a call from a broker that they\u2019ve done 100 deals with and they know you\u2019ll probably get much quicker responses. \n\nCalling the tenant directly could help, or it could do nothing but piss them and the broker off.", "replies": [{"id": "ht52yoi", "text": "I was thinking the same thing. If current market rents (as in, what he can get a new tenant to pay for his space) are truly 2x what he\u2019s getting with his current tenants, it seems like a no brainer.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "ht4mthz", "text": "The rationale is having someone experienced in negotiating on your behalf. Renewals aren\u2019t at simple as telling a tenant you\u2019re increasing their rent. Term, TI packages, changes in the structure (base year vs net, gross ups, etc) can all come into play and change the value long term.", "replies": [{"id": "ht4nzby", "text": "Great comment!!! \n\nAt what expense though? If I truly want to dive into CRE and not as a passive investor I want to learn everything about it. I wish there was a mentoring program or someone tha could push me in the right direction. \n\nClosing was a royal bear with this seller. I liked the building and the open land it sat on for another building opportunity.", "replies": [{"id": "ht522zl", "text": "&gt;I wish there was a mentoring program or someone tha could push me in the right direction.\n\nHave a broker clean up/lease a few of your spaces, go over what worked and what didn't work. Take the learnings from that and apply it elsewhere.  \n\n\nA shitty lease is very expensive. Not saying all brokers are good/bad/ugly, but I bet you will learn something by having one go to bat for you. You might learn to never use one ever again. YMMV.", "replies": [{"id": "ht55mxd", "text": "Thanks for the response. I've gone through the prior owners lease, and the leases other nationwide agents use. They are all pretty straight forward. Its standard verbiage. \n\nI dont want to nickle and dime tenants at the end of the month. I want them to see one bill, and thats it. As a business owner, I hate seeing multiple different invoices. Im sure they dont like it either.\n\nI dont think I ever want to use one period. Lets just say this business is addicting and fun. So much so that I may go into multi family, industrial, office, medical, or special purpose again before the end of the year. I still have a lot of work ahead of me.\n\n&amp;#x200B;\n\n1. Lease Up\n2. TI with current tenants coming due for renewal\n3. Renew mtm leases/appropriate bump ups\n4. actual capex and improvements", "replies": [{"id": "ht56dxs", "text": "Good luck on your journey! Agree that an outside broker is not a silver bullet for everything.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ht4hpk2", "text": "I would bring in a broker for the renewals", "replies": [{"id": "ht4u43a", "text": "Probably writes his own leases too.", "replies": [{"id": "ht58vyo", "text": "Yea, I also dropped out of med and law school. I may go back to law school if I get into a top ten. Did you get into Harvard?", "replies": [{"id": "ht6bc4v", "text": "No, just lowly Cornell", "replies": [{"id": "ht8iioc", "text": "Imagine coming onto Reddit to measure dicks and talk shit", "replies": [], "depth": 5}], "depth": 4}, {"id": "ht89ger", "text": "\u2026are you saying you\u2026 dropped out of Harvard? Like, as a good thing? Chill and accept you won\u2019t like all the feedback the Internet gives you.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ht4mba5", "text": "New leases and renewals will involve two different approaches, and your goal of a 50+% increase in revenue for a multi-tenant office(?) is pretty aggressive, especially with the outlook for office IMO.\n\nYou say the tenants in the building are significantly below market rate, but are they below market rate for the *building vintage and quality of space they occupy*? What\u2019s their sentiment for occupying the space long term? Gotta feel it out by talking to them. You might find yourself needing to offer them a refresh on their space with significant TI spend in order to get a better rate. Are you in a position to make that investment? You might need to in order to get them onboard with a long term lease. \n\nI am very curious what the circumstances of this transaction were. Why didn\u2019t the prior owner secure new leases prior to selling? But that is outside your post topic.", "replies": [{"id": "ht4nkmr", "text": "The last part of your question requires a different post since it involves a lot. Upon closing a major tenant informed me they weren't renewing a month after their lease expired. 20% of my rent roll dropped. I busted my tail to get that back in 4 months. I'm just glad 20% now isn't baked into just one tenant now, and its spread apart.\n\nBack to your question: They're below for a myriad of reasons. Maybe they've been there for as long as they have due to price and not the vintage look? Price and a combination of location, I'd say low rates have kept them there. I agree TI will be required, but why not focus on NEW tenants? The building pulls in millennial entrepreneurs. The older tenants are above the age of 45 and go to 65. I am the youngest tenant in the building. Starting to see you get blood, but want to keep it professional and classy. \n\nWhy would he secure leases prior to selling? He didn't care bc he had other massive projects to focus on. I assume he wanted to keep tenants in their and not force a lease renewal and keep them on a month to month.\n\nI need to make moves soon.", "replies": [{"id": "ht4p1h8", "text": "Typically he would have renewed leases in order to maximize the value before selling. Looks like maybe he knew that the tenant that was 20% of the building was leaving and decided to sell before that news officially came out and stuck you with the releasing effort, while getting you to buy the building assuming that income was in place. \n\nLease terms matter, renewal is never guaranteed.", "replies": [{"id": "ht4pv39", "text": "Essentially thats what happened. The estoppel never brought that piece of information to surface. It hurt a lot mentally,, but thankfully I was able to make it work. \n\nIt felt like nothing or no one was ever in my corner. From the AC issues, to losing a tenant that had been there for over 10y. The tenant said if he knew I was buying, he would've stayed. \n\nThats in the past, and I see more potential in my self and the building than I did that day when I heard they weren't saying.\n\nI've finally recouped that 20% if not more with 6 month escalators in certain spaces with the new tenants.", "replies": [{"id": "ht4qrwk", "text": "Good for you. Sounds like you\u2019ve got a positive attitude about it and are gaining valuable experience in CRE from this property. Don\u2019t feel like you have to do everything yourself. Rely on experts for everything from legal to tax/accounting to construction to leasing. You\u2019ll be there every step of the way, but leverage other peoples expertise to make this property a success for you.", "replies": [], "depth": 5}], "depth": 4}, {"id": "ht4qu0u", "text": "The seller was a well seasoned CRE guru. After seeing his stupidity in action, I knew that big brokerages often hired and recruited idiots. From the sellers broker, to the seller, very low competency levels from their rent roll to misleading information. I could've pursued a les pendens but I didn't want sort of negativity lingering around.\n\nI once asked the seller during negotiations for advice on partnering up with someone bc he didn't think I'd close. He said ONE important thing.   \"Does God have a partner. \"    I still never met him after being his tenant, but I followed those words and glad I did it solo with the helpful guidance of others. Doing deals like this gives you a different perspective in life.\n\nI come from ibanking, and this veteran would've been laughed for his fraudulent law suits. Wouldn't be hard to find out who he is. I'm done with that rant. \n\nThe goal is to get it to 95% occupancy at market rates with old tenants seeing avg bumps, and new tenants seeing rates at market accompanied with TI.", "replies": [], "depth": 4}], "depth": 3}, {"id": "ht4wka4", "text": "I think you need to try and look at this from the perspective of your long term plan. Keeping a tenant in the building by offering them a TI allowance to refresh their space in exchange for a *closer to market* rent will likely be cheaper than letting them leave and re leasing the space. New tenants have new space requirements and that gets expensive fast. It\u2019s all a numbers game though. You have to make an educated guess about how long the space would take to re lease. You need to understand what the tenant is willing to pay or even can afford. You need to understand whether they have a desire to lock in a long term lease and rate security, or maybe are willing to pay a higher rate for a shorter term lease. \n\nYou also need to decide whether it\u2019s worth offering the other spaces at below market rates to get tenants in the door. Or maybe you offer abatements early on to entice them with a higher rate. Again it\u2019s all a lease value calculation.", "replies": [{"id": "ht4yv6p", "text": "Very well said.\n\nSaid tenant pays $20/ft for 2186 sft (classroom), wants TI not to exceed $7k (new carpets, LED lights (30 fixtures-currently has 30 old school 2x4 flour.), and two designated parking spots for the trainers.)\n\nThis is used 3 times a week as a training facility for their employees, state owned business with good credit has been in the current space for over 8y.\n\nCan they relocate yes, would it cost them more to build it out yes. They have a nice space with 2 break out rooms, and good sized class room and ample parking, with a kitchen area, counter top, storage, etc.\n\nI don't want to lose them but, the TI can add up. I'm thinking about allowing them to pay for TI and shortening the lease terms by two months provided my contractors do the TI?\n\nThoughts?", "replies": [{"id": "ht5z76v", "text": "$3.20/sf for TI seems like a very reasonable ask from them to renew. \n\nWhat does shortening the lease by two months do for them? Do you mean two months of free rent? If just shortening the lease all that means is that they have to renew two months earlier.\n\nAs a tenant if you weren\u2019t willing/able to pay for the TI as part of my renewal but were requiring me to use your contractor to do them I would be concerned.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ht4zdhr", "text": "A bunch of comments here from folks that are definitely pro-broker and not necessarily wrong but it really depends on situation. \n\nI\u2019ve taken on two projects very similar to this and here\u2019s what I did. I lease up new space first. I don\u2019t materially mark up existing tenants until I know the property specific leasing velocity and market rents. You don\u2019t have that much FCF, I wouldn\u2019t screw with your occupancy. I would roll them mtm so they\u2019re not locked in. \n\nIf your vacant space is leasing fast and at great rates like your thesis projects, you use this to go to current tenants to show them what market is and justify the increase. You also have more occupancy padding and know how long it\u2019ll take to fill vacancy. Then you just start moving through your rent roll one at a time. Also start to stagger your lease terms a bit so you don\u2019t have so much term risk. \n\nMy personal opinion is that I 100% disagree with using brokers for renewals if you have any CRE experience and know your way around a lease. Huge waste of money. If you\u2019re truly wet behind the ears it\u2019s a totally different story of course. \n\nI actually like your idea of taking to market on small spaces first. Someone posted that you only get one shot. Personal experience for me had shown otherwise. I just posted a couple weeks ago about firing a broker and self listing and I\u2019ve already talked to two tenant reps who wanted the scoop and to take another run at it with their tenants to feel out if they could make it work with new representation. Also if you\u2019re just listing small space it won\u2019t even hit the radar of anchor type brokers etc. \n\nI know my experience is a tad contrarian and I\u2019m not suggesting anyone here is \u201cwrong\u201d just that there are different ways to crack the nut and broker commissions, especially on renewals will drain your capital coffer fast.", "replies": [{"id": "ht53oen", "text": "I come from a different world of finance with a different business model that deals with active trading/investing vs passive. I agree with you that I want to eliminate the broker out of the equation on my first deal, but at the same point I wanted to hear from those that are pro-broker. I need to watch every dollar in the near term and do what I can on my own. \n\nYour strategy is great and thought  process behind it is spot on. I also don't want to screw with existing tenants, especially under new ownership. I saw the skittish tenants squirm and immediately set up meetings with me to articulate that they didn't want to renew unless significant TI was done. So I left them as they were on a mtm.\n\nI took the approach of marketing and leasing up the smaller individual offices first to see the traction in that market. One hall way is fully occupied and my only employee is also getting rewarded by making sure her comp is positively correlated with newer tenants/leases. What's $50 to $100 more per pay check for her if shes been there +5yrs and I dont have to worry about small things? \n\n&amp;#x200B;\n\nGreat points on staggering leases with regards to term risk, and leasing up the empty spaces before going to the MtM tenants. Love that strategy!! I'm intentionally taking my sweet time to lease up because of that. I am totally wet behind the ears, but this is much easier than my career in ibanking/trading. But again, there are strategies to apply that only experience will show me. \n\nI'm obviously new and extremely wet behind the ears, hence my questions. \n\n\\*\\*at what point should I market on LoopNet for better tenants or larger ones?\\*\\*\n\n\\*\\*I'm also trying to take a stance with the state to make this a historical property for obvious reasons. There is a valid case that I can make, but this would be appropriate for another post. \n\nOr should I even bother marketing on their and just my own methods and go the contrarian way?\n\n**Thanks for everyone's comments here!**", "replies": [], "depth": 2}], "depth": 1}, {"id": "ht51iy1", "text": "If you are depending on the current income to keep the building afloat, personally I would not raise rent on the existing tenants until you have improved occupancy and extended the commercial tenant you mentioned. \n\nOnce the building is nearly full, you will be in a much better position to bump rents and not stress over losing some revenue. Also, assuming you have a building improvements/CAPEX plan, the tenants will see these improvements over time and possibly be more open to a rent bump, knowing that it is going into the building and not just into your pocket.\n\nAlways keep an eye on tenant concentration and term risk. You've mentioned going month to month on the offices, but would you rather get some of them on longer leases with personal guarantees in place?", "replies": [{"id": "ht54w7o", "text": "I can see the value in a PG, and hedging the risk correlated to a mtm lease. Mentally I feel as though I have very little leverage, or experience for these tenants to play ball so to speak. \n\nI agree with your stance and a few others in waiting to bump up rents until the building is padded up and occupied. 100% agreed with this approach. Upon closing I didnt want to bump up legacy tenants. I havent put a dime into my pocket from the gains thus and placed it back into the bank.\n\nMy own business started from here so there's a connection with the tenants, but I think we all knew that we were paying below market prices. I made a strategic decision to purchase this off the radar so that the new owner wouldn't interrupt my business and location. (A very strategic tactic on my part). Bringing in new leases is the primary goal.\n\n&amp;#x200B;\n\n\\*\\*Im just debating on how to market the larger spaces\\*\\*\n\n&amp;#x200B;\n\nThanks for the response u/CRE_Energy", "replies": [], "depth": 2}], "depth": 1}, {"id": "ht54w54", "text": "If you haven\u2019t already, have an attorney review the existing leases/amendments. And strongly recommend drafting entirely new leases for your existing tenants (in addition to new ones). I\u2019d also recommend spreading out your expirations to help avoid big valleys if a handful of tenants leave at the same time. Good luck.", "replies": [{"id": "ht55rmq", "text": "Thanks all of these tips are helpful u/wickerwacker", "replies": [], "depth": 2}], "depth": 1}, {"id": "ht5aw39", "text": "I love how you keeps saying the seller was a CRE veteran, and the CRE guru. Seems like a CRE idiot to me, Either that or there is some more skeletons buried in this deal. No savvy CRE \u201cguru\u201c would sell a property without market stabilizing the rent.\n\nDefinitely more to the story here. I might be biased but unless you are a commercial real estate expert the small percentage you would pay on hiring a excellent broker, and I\u2019m not talking an average Joe put up a sign and say a prayer type broker. I\u2019m talking about one that will make sure it is listed on every database out there, actually paid to have premium listings on things like LoopNet, have a team to answer phone calls, and respond to every inquiry whether via email text or phone within a couple hours, put up signage, do videos, do pictures, make brochures, have a dedicated website for your property etc. etc. etc.\n\nThis one is definitely interesting I look forward to hearing updates from you and wish you the best!", "replies": [{"id": "ht5ctba", "text": "I plan on doing much of that marketing and leg work my self. Say a prayer type of broker is a joke, hence why I stuck a sign up, put Ashley's name on it, and my phone number. 2hours to answer an email? Try one ring and I'm on it. I'm planning on doing videos, marketing on every data base, etc.\n\nWhats his motive to stabilize rent before selling it? Maybe he wanted to distance him self from his prior money laundering cases/property before his new startup. One of the top trial lawyers in the US decided not to take my case against him for God knows what reason. The case has some teeth, I just need the right attorney to hear the story.\n\nHere's why I say he's a guru:\n\nHe is very sharp, and a shark in some circles. He's been in the business for a number of years with one of the largest names in the business from property mgmt to capital markets, representing institutional deal flow and not mom/pop investors. His vernacular, mannerisms, and approach, it was indicative that his experience was more on capital markets and financing and not really managing the asset. \n\nWith that sort of experience, one would assume he had his personal assets better managed and deals negotiated better. He was a terrible seller. He may have had a knack for sourcing great deals which he stole, but not a good landlord or seller by any stretch. \n\nHis PM was a pathetic excuse for a yes man. His selling broker was a China town clutz. I would frame the seller as a slum lord of office buildings. He was a Class C owner that sold an asset to a kid with zero experience, that paid a premium bc the kid knew it was going to be worth $5M plus in 2y max. \n\nSeller distanced him self away from the property bc there had been prior law suits and bankruptcy filings associated with him and said property. This wouldn't look good with the sellers new endeavors where he MIGHT be trying to fraud investors again. Its a shame this type character is hired by some of the top brokerages out there. \n\nSo yes, there are a lot of skeletons behind said property and the seller. His new investors wouldn't be too keen on investing with him given his track record.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ht5q4iq", "text": "What a fun project. Best of luck on this.\n\nIn my case, I purchased a building owned and managed by a doctor, never well known for maintaining a property well, writing proper leases. The building hadn't been painted in 20 years, the parking lot was in complete disarray, sidewalks were broken, slanted, landscaping was overgrown, interior carpets were original....it was a total shambles.\n\nBefore I bought it I met with every tenant and asked them what was missing from this property, what needed to be done, and if they had a wish list, what would it be. I already had the rent rolls and what they were each paying. Like your property, they were at half the (then) market, no NNN's: $ 10.00 sf.   I had about 60% vacancy at purchase.\n\nI made a list, it was extensive, but none of it was truly expensive.  A lot of it was intrusive (new sidewalks, ADA ramps, complete paint inside and out, redo fire systems,  new carpets) and I asked the 3 main tenants, *\"if I do these things, would you allow me to renegotiate your rent to something closer to the market rate, less, say 15%?\"*\n\nAll 3 said yes.\n\nI did everything I promised *and more,* it took 18 months, I waited 6 months *after* I'd proven myself to sit down to renegotiate, all of those 3 stayed, they love it in my buildings and, with an annual 4% floor increase, I've been above market on increases for 7 years and my rates are now close to 6% *above* market in total, 5 of the other 8 stayed and also love it here. Since, I've added at least as much tenancy in SF as I had when I bought the place, at rates I find far more appealing.\n\nThey get white glove service from me, and I get above market rates.  I keep approx. 15% of the building empty for growth of existing tenants (haven't needed it yet, but this allows me either to have what they need if they need it, or, ask what I want for any remaining space). And none of my tenants occupy more than 15% of the total.  That's a rule of mine I will never alter.\n\nWhen I acquired the place, local brokers told me I'd be *lucky* to get $12.00 a sf (all in) for the available space (it's an older class B, 15 miles outside of a larger city).  They wouldn't even show it.\n\nAfter I made the improvements, I got the existing tenants up to about $17.00 and since, with the 4% or CPI whichever is higher annual floor, they're up to about $23.00 a sf, but I leased out the ***empty*** spaces for about $35.00 - $40.00 a sf (smaller one man office suites).  I even have one space (210 sf...hidden away) that is impossible to lease, took me 3 years to lease it...had it leased once at $37.00 a sf, then due to covid restrictions (medical tenant, stayed for 4 years) she had to leave the business (she didn't want to take the shot...one man band so...she simply retired)...but like all spaces, they're perfect for someone. Now leased for $52.00 a sf and the new tenant is thrilled to have it as she's a counselor and wants a supremely quiet area.....this space is all that and more. She just spent $6,000.00 of her own money on a TI for it, and she moves in in about 3 weeks.\n\nMost agents told me to give that space away for storage to an existing tenant as an enticement.\n\nLemonade.\n\nMost of my tenants aren't seasoned lessees.  They wouldn't know a triple net from a tennis racket.  They pay a base rate, within which are my triple nets.  It's easy for them to grasp, and I don't have to do any crazy accounting of all expenses each year for them (and they don't really care).  Win / win.\n\nI list it on Craigslist at $29.00 + NNN ($9.00), depending on the space (smaller is more per sf) and I don't get a ton of calls at that price, but, I really don't care.  The building is now 15% vacant, so no one feels squeezed in, I'm generating 6 times what the building produced when I bought it, and it cash flows like a river in spring mountain melt off.  I want enough money coming in to pay what I feel is an appropriate return on my investment and enough for me to keep the place in tip top shape for my tenants.\n\nThey all know they're (now) paying at or above the market but they *also* all know, when they say \"*jump*\"....I'm already in the air. And when their Guests / customers come by, it's spotless in every way and they're proud to have their businesses there.\n\nWorks for me.\n\nIf your building is a C....look for things that sizzle.\n\nSizzle *always* sells for more money than steak.\n\nSeal coat the parking lot, restripe it, fix the potholes, paint the building, come up with a plan for the entire building in your minds eye....that's your *\"if I had a million bucks*\" wish list. Then itemize that list by cost.\n\nDo some big obvious stuff immediately (parking lot, building paint), then start hitting that wish list, cheapest items first...this way the tenants see progress and action.\n\nIn a year....maybe 2, you'll have people knocking on your door asking you if you have space available, *your* tenants telling other potential tenants about your building (or you), and you'll have existing tenants either thrilled to pay what you're asking, or ready to move when a new tenant asks you for a large enough space that a few of your existing month to month tenants, just have to go :)\n\nAnd every year your average rent will get closer to the market and maybe rise above it as well. It sounds like you're going to be an onsite manager (as I am for this building). Keep in mind; so long as the building and property are kept clean and presentable, they're renting space....as much as they're renting *from you*. As an onsite manager, you have a unique opportunity to find out what their unique needs are, and provide them like no other landlord can.\n\nNobody wants to move.\n\nProve to them why they shouldn't.", "replies": [{"id": "ht5q5eq", "text": "15 miles is 24.14 km", "replies": [], "depth": 2}], "depth": 1}]