Closing deals in the Tenant Occupied market presents a host of challenges not present when selling to owners who occupy their buildings.
Below are six commonly asked questions for which you need answers to sell effectively in this space. We provide answers to these and more in training which is reinforced through Ongoing Coaching.
Question 1: Who pays for maintenance, repairs, and utilities?
- It’s tenants most of the time. At other times it’s the owner
Question 2: How do I convince an owner to replace old, inefficient equipment when tenants benefit from the reduction in operating costs?
- Sometimes owners DO benefit from the reduction in operating costs.
- In this scenario, the traditional method of emphasizing cost reductions often doesn’t work.
Question 3: How do I convince tenants of the benefits of preventative maintenance? Some get it, but many don’t.
- The root of the problem is that tenants don’t own the equipment.
- Instead, it’s the owner who benefits from:
- the extension of the life of equipment, and
- the reduction in the life-cycle costs of equipment ownership.
- Therefore, the owner is the natural beneficiary of long term preventative maintenance.
We believe in many cases preventative maintenance should be sold directly to the owner. They may direct you to the property manager and that’s ok as well.
Question 4: Why do I need to understand leases to maintain facilities and replace equipment?
- You don’t have to understand leases in order to do the technical part of your job. However, understanding them provides the building blocks for how you position the benefits of your solutions to the C-Suite.
Property Leases 101
Property leases outline the following as between the owner and tenants:
- who has responsibility for maintaining the building including equipment, and
- who pays for maintenance, repairs, utilities, and how common area expenses are allocated.
Therefore, they determine:
- who you sell to,
- who benefits from your solutions, and
- who pays for them.
In our program you’ll learn the basics of:
- Triple net leases,
- Gross leases, and
- Modified leases (a variation of the two above).
Question 5: How do I know when a particular leases type is used in a building?
- In many cases, the type of lease used depends on the configuration and function of the building.
Question 6: Once I understand the type of lease likely used in a building, how do I put this into practice?
- It can immediately show an owner you understand their business which is essential. Example:
You: “We work with many tenants who occupy buildings with triple net leases. We find they can be somewhat indifferent when it comes to taking care of your equipment. Do you find that to be the case?”
Owner: “Yes we do. We often have to pay for costly repairs once the tenant moves out. This can also delay our ability to attract new tenants due to delays caused by the repair. That also results in more dollars out of our pocket from the loss of rental income.”
We provide answers to these questions and many more in training. Once armed with this knowledge, the remaining step is to learn how to position the benefits of your solution to the C-Suite.
This requires an understanding of the Art and Science of selling to the C-Suite. Learn more here.