Part Two of a Three Part Article

The Stereotype Lives On Remember the 1990's movie, "The Supor" starring Vincent Gardenia (the father) and Joe Pesche (the son)? They were residential slumlords in Manhattan. Throughout the movie, every time that Joe Pesche attempted to do right by his tenants, his father would stop him and say "Sonny! Don't you remember what I taught you since you were a little boy? What do we do for our tenants? We don't do nuttin!". Any wonder why even great landlords get a bum wrap?

Andrew B. Zezas, SIOR Relationship Manager, Strategist, President (908) 245-5999 x11 andrew.zezas@realstrat.com

The Tenant Service Business

The best commercial landlords in the business recognize that they're not first in the business of investments, real estate, risk, cash-flow, or wealth building. They understand that, like in almost every other service business in the world, their objectives of generating high returns and building substantial wealth will be more quickly and fully achieved through the recognition that they are in the customer service business...the service of tenants, that is.

Great commercial landlords know that "service" doesn't start a year or two before a tenant's lease expires just so they can entice that tenant to renew, and not even when the lease commences. But, the highest caliber Tenant Service starts from the first time the landlord meets the tenant, continues through negotiations and construction, and extends everyday from lease commencement through expiration.

Deliver More!

And, by the way, as in other industries, great Tenant Service is not merely making sure the lights are turned-on and the rent checks are collected. High quality Tenant Service extends beyond what is expected, what was promised, and what is customary. In the Tenant Service business, the most successful landlords are keenly aware of the ups and downs of their tenant's businesses. True Tenant Service means supporting the changes in tenants' businesses, being flexible whenever a landlord can, and providing tenants with opportunities to achieve their business objectives and enhance their companies.

No Free Lunch!

Providing incredible Tenant Service doesn't come cheap! Think about it...any great hotel, fine restaurant, or other establishment that is noted for excellent service typically charges higher prices. And, those are the places you can't easily get into because they're always jammed with people enjoying great service and happily paying higher prices!

The world is full of opportunities to purchase bare bones, rock bottom, minimal, or no service at commensurate prices. Unfortunately, in real estate, occupancy costs and levels of service don't always line-up. High quality service requires resources and expertise, all of which should come with a fair price, but recognizably, a higher price. So, for those commercial landlords who say providing superior Tenant Service is too expensive...you have no excuse!

Service, Service, Service!

So, what's a landlord to do? First, stop thinking real estate and start thinking about your tenants! Don't just focus on them when the rent check is late. Study them, research them, and determine which Tenant Services you can provide to them and their executives. Select those Tenant Services that would help tenants accomplish their objectives, so that you can achieve yours. Now, I'm not talking about tickets to ball games and dinners (although they're always a nice gesture!), and while tenant appreciation picnics say a lot about a landlord's willingness to say "thanks" and they go over well with rank and file employees, they don't create much lasting value for the tenant company, nor do they provide any real service for the executives that run those companies.

Here's one: Instead of sending a building manager in a uniform to meet with tenants, whose main responsibility is keeping the building's mechanical and other systems operating and who is not usually trained in providing service to highly successful executives, landlords should consider establishing an Office of Tenant Customer Service. This is not a concierge, although that's a great service opportunity, and one that tenants really appreciate. The Office of Tenant Customer Service should include white-collar professionals trained in executive communications, relationship building, and customer service, and should be well-versed in satisfying the concerns and needs of high-level business executives.

Those in the Office of Tenant Customer Service should seek out relationships with executives at tenant companies and meet with them yearly, quarterly, or monthly, if needed. Their objective would be to:

• Establish firm business relationships with tenant executives
• Maintain a sense of connection between landlord and tenant
• Build and elicit regular communications
• Identify challenges in either the real estate or the tenant's business long in advance of those challenges becoming critical
• Suggest alternatives and devise practical solutions quickly
• Seek out new methods for almost anything
• Search for opportunities to enhance services and the overall tenant experience
• Understand the ups and downs of the tenants' businesses
• Suggest creative ways for the landlord to support the on-going and changing business needs of its tenants

What would this accomplish?

Watch for next month’s issue and the third installment of this article where we’ll answer the above questions and discuss a radical change to how landlords may conduct business.

Andrew B. Zezas, SIOR, is Relationship Manager, Strategist, and President & CEO of Real Estate Strategies Corporation, Publisher of "Business, Profits and Strategy", a monthly online publication read by thousands of business, financial, and real estate executives nationally, and, is the author of two new real estate books, The CFO's Guide to Understanding Corporate Real Estate Transactions and The CFO's Guide to Hiring the "Right" Real Estate Service Provider, both of which will be available shortly at www.thecfosguide.com.

Mr. Zezas is well-known for his ease and informative style of public speaking, and has given talks, presentations, and has lead educational programs for business, professional, government, and trade associations, including the Building Owners and Managers Association, American Management Association, the U.S. Postal Service, RealComm, Society of Industrial and Office Realtors (SIOR), and others. Andrew is National Chairman of the SIOR Tenant Representation Specialty Practice Board, and is a licensed real estate instructor in Texas and Indiana. He can be reached at 908 245 5999 or via email.

Real Estate Strategies Corporation, located in Kenilworth, New Jersey, and serving clients throughout the country, helps companies create and execute Business DRIVEN Real Estate Solutions...and Opportunities, faster and with less risk. Visit www.realstrat.com.

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