Be Mindful of your tenants when doing major renovations or repairs to your retail plazas.

GREG ARBUTINE
Oct 22
3 min read

Updated: Oct 22

Keeping tenants happy during major renovations or maintenance projects

As a retail landlord you need to make sure that your tenants are happy when you are doing any kind of major renovations, repairs or improvements to your building and common areas. If tenants are adversely impacted they will possibly go out of business or be left with a sour taste in their mouths and shop around for a new location and won't renew their leases.

Here a few landlord tips and rules to follow when taking on any kind of major improvements that could adversely affect one or even all of your tenants:

Communicate Effectively and Allow Tenant Input - Use effective communication to let the tenants know what is going on and how long the improvement or major maintenance item will take. In example, if you are re-doing the asphalt in the parking lot, let the tenants know far in advance of what date and time it will be performed and how long it will impact them. Give them a chance to chime in and to have a say on when the best time is for such a task. You would certainly not want to shut down your parking lot on a store's black Friday event.
Be Smart and Strategic on Timing - If there is a certain time of year that is slower for most of your tenants for a major improvement or much needed maintenance project, then you will want to elect to perform the task at that time.
Cost Benefit Analysis - If you have have to pay more to get the job done faster to your subcontractors or general contractor in order to keep the tenants happy, you might want to consider doing so. If you piss off your tenants and it is perceived that you are dragging your feet as a landlord when implementing repairs or renovations, it can cost you dearly in tenant retention rates in the long term.
Be Realistic and Fair - If you are performing just a minor repair or improvement like let's say just painting the building, then it's likely no impact at all on your tenants. You need to make a judgment call and projection on doing improvements and major building maintenance. Try to be realistic on what you think will happen to your tenants during such activities.
Be Pro-active and Negotiate Concessions as Necessary - If you refacing the building or performing some other major renovation that will absolutely impact the visibility or access to specific tenant spaces for a period of weeks or even months, you might want to be pro-active about giving the affected tenants a concession up front. In example, you are wanting to improve the overall outside appearance of the building, but in the short term one or two tenants will have to have scafolding for 2 months and be almost completely blocked for drive by traffic visibility that entire time. As a landlord you need to be pro active and give rent concessions to accommodate the potential loss of business your improvements or maintenance issues will cause to a tenant's business. If you don't do this, you risk putting them out of business or risk losing a future lease renewal from them.

Conclusion: Tenant retention should be all landlords' number one priority. Don't do yourself in by being oblivious to potential impacts of your own making. If you don't look towards the long term and just assume that any short term impacts you create for your tenants will be just fine with no problems, then you are just disillusioning yourself as a business person. You need to be respectful and keep your tenants as happy as they can be during any kind of major renovations or repairs, otherwise, in the long term they will leave or go out of business as a result. Be pro-active, have good communication and don't be afraid to give compensations when necessary to keep your tenants happy during a potential impactful building project.

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Thanks,

Greg Arbutine

Alan Development Co-Owner

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