I recently lost a tenant in a small four unit strip mall. Approximately 1200 ft.² of 5500 is vacant. I have been able to fill one other building fairly easily with referrals from other people, but I don’t have someone lined out as of yet. I have an idea of reaching out to local accountants to see if they have clients looking for new locations. Has anyone done this in the past? Any thoughts on this idea?

I highly recommend hiring a broker. They will help market, negotiate and sell the space. 5% direct or 6% coop fee would be your cost, which should be far less than any vacancy cost in addition to your time. While I am not familiar with your market, this is something that won't cost you anything out of pocket until the deal gets done. In Milwaukee, I would assume you have a few groups that you could discuss with to see who will be the best fit for your property. 

@Paul Cattin does the broker normally also wants a % if tenant renew?  We are in the same situation and this broker wants 6% of new lease, and 2% if the new client renew, and wants us to sign exclusive agreement.  We are newbies and in Texas. Thanks!

@Jeff Stein Here are few strategies for securing tenants (having been on the broker side and developer side).

1. I would interview the local commercial agents in your area first.  They will likely have tenants in their back pocket looking.  Offer full fees (or even a fee and half).

2. I would post on websites that local business owners are looking

3. I would post on Linkedin and target your ideal prospects.

Sounds like you have a target list of tenants.

Can you do anything to make the space more appealing - or is it move in ready?

What can you do to incent a tenant?  Free rent?  TI's?  Parking? Signage?

Not knowing the market you are in (soft or aggressive) - hard to say exactly what will work.  

Last- if you (or your agent) is going to be aggressive you could send out postcards out to the business owners in your area (unaddressed mail - or something similar in US).  I'd also look to door knock.  If you don't want to - get your agent to.  Surprisingly effective.  No one likes doing it. 

But if you're prepared to do things others won't - you'll fill it

Good luck

@Shane Melanson

Thank you. Those all sound like very good ideas. I currently have a broker and the building is under contract. Communication has been poor in my opinion so I am always looking for a back up option.

I'd recommend connecting with a leasing broker also.  I can connect you with one that I know.  Reach out if you would like his contact info. 

@Jeff Stein that is always a risk and challenge. I had to fire my last broker. If the deal is too small it’s hard to get top brokers to work them. Better to go with someone hungry and maybe smaller.

Originally posted by @Shane Melanson :

@Jeff Stein that is always a risk and challenge. I had to fire my last broker. If the deal is too small it’s hard to get top brokers to work them. Better to go with someone hungry and maybe smaller.

Too small also means pay bigger %, the brokers I know love talking about crazy landlord paying 8%. Bottom line, they are talking about you and your space and will get a tenant in ASAP if its market rent, etc.

Once you get a better feel and build a relationship, you can start to save money...

@Courtney Duong it can depend how the listing agreement is written. Regardless, you would only pay on the initial Term, not the renewal options. Which, you can dictate in the agreement.  It's my opinion that a tenant should be entitled to some representation if the lease is being altered or changed in any way at the renewal. This could simply mean a rate adjustment. That said, as a landlord, you can certainly draw a line in the sand and cross that bridge when you get there. However, I would not risk losing a tenant over debating a fee to their broker 'if' they have one at renewal. 

Jeff Stein,

Your post seems confusing.

You said (Thank you. Those all sound like very good ideas. I currently have a broker and the building is under contract. Communication has been poor in my opinion so I am always looking for a back up option.)

In your original post you made it sound like you owned the building already. When you say (building is under contract) do you mean you are selling a building you own to a new buyer OR did you write an offer to purchase this building as a buyer and while under contract one of the spaces went vacant OR you own the building and not selling it but have an LOI to lease the empty space from a leasing broker?

I've been in the commercial space across both Canada and the US for the past 20 years. I've always sought out the best leasing brokers for my portfolio and paid them handsomely for the 'quality' tenants they brought me. As for renewals, I've also crossed out any mention of commission in any rep agreement, no matter one man shop brokers or the likes of CBRE. It just doesn't make sense to me. I've never once had an issue with this from a broker.

@Joel Owens

I apologize for the confusion. Let me try to clarify.

My 4 unit strip mall has 1 vacancy which I currently have with a broker. I am disappointed with the lack of communication, but they are under contract for another 3 months.

I have different building under contract now 20,000sqft. Office building that is approx 50% leased

@Jeff Stein - switch broker right away!!

The majority is not very good. 80/20 ruel applies (might be even 90/10). 

Also, a great broker will not work for peanuts; you get what you pay.

@Paul Cattin Thanks.