Building and maintaining a strong tenant base is not only a matter of effectively attracting new tenants but also creating strong ties over the term of a lease to help ensure that all-important lease renewal.
One company long-committed to building relationships with its tenants is First Industrial Realty Trust, Inc. based in Chicago. “In normal times, tenant retention is important; in tough economic times, it is critical because the cost of replacing a tenant is so significant,” said Charles Rollins, senior vice president of operations for the east region.
Rollins noted that relationship building with a First Industrial tenant begins before that prospect has any contact with First Industrial. The company wants its reputation to precede it in the marketplace, through existing tenants and with the brokerage community.
When it initially meets with a prospect to show space, First Industrial wants that would-be tenant to be impressed. To achieve this, it has created what it calls its HOOP process. HOOP stands for the High Occupancy Optimization Process to ensure that the space is clean, painted and repaired. “The space shown must reflect how buildings are maintained; it also allows tenants to understand how the space will work for them.”
Once the tenant takes the space, First Industrial aims to keep in contact through a series of what the company calls “touches.” That is, different groups within the firm reach out to the tenant on a regular basis. It has what it terms a 30, 60, 90 process. In the first 90 days of the tenancy, the new tenant will have touches from three different groups within the company, including the leasing group, its project management group and the property management group. Then after 90 days, once the tenant has had an opportunity to settle into the space, it will again hear from the leasing group so that First Industrial is satisfied that it has done everything that it promised to do for the tenant.
“At least annually the leasing staff will reach out to the tenant. It could either be the leasing director or our marketing-leasing coordinator. The individual will call to ensure that things are going well for the tenant. The company wants the leasing staff to see tenants periodically, not just when the lease is up for renewal.”
When the maintenance staff or outside contractors interact with a First Industrial tenant, that too is considered a touch. “Everyone in the organization is an extension of the company,” said Rollins. “There are times when a problem will come up and outside contractors are brought in. There is a code of conduct that applies to all employees and outside contractors.”
Building Tenant Relationships
Rollins and First Industrial have a number of other ways they continually build relationships with tenants:
Surveys. First Industrial is a firm believer in surveys and conducts them throughout the year to determine how the company has performed and what it can do differently to improve its service. “It’s like a report card. Having measurable goals and really knowing what tenants think of us is crucial,” remarked Rollins.
First Industrial conducts three different types of surveys:
After move-in. After a new tenant is in place, First Industrial surveys the tenant to determine how the leasing group performed, how the project management group performed and how the property management group transitioned into taking over that property.
After a maintenance call. Any time a person from First Industrial’s maintenance department or an outside contractor interacts with a tenant, the firm will conduct a survey to make sure that the company has performed to the tenant’s expectation and to its own standards.
The annual survey. The company conducts an annual survey to determine how it can improve its service to its tenants.
Rollins said that several years ago one of its regions did not do well in the annual surveys. But what it did do was take and implement tenant recommendations. Today, it’s the best performing region in the company in the annual survey.
Customer service. In every office, First Industrial has a “customer service coordinator” position. Rollins said that the title of that position previously had been assistant property manager. “The title was changed a couple of years ago to make clear what the objectives of that position were,” he emphasized. “That position is to serve tenants. The customer service coordinator drives the process. They start the process and they make sure that everyone is doing what we expect them to do.”
The Two-Hour Rule. First Industrial has a two-hour rule for handling tenant calls. If a tenant calls with a problem and its customer service coordinator cannot talk to the tenant immediately, the tenant must get a call back to them within two hours.
The 24-Hour Rule. Besides the two-hour rule for getting back to a tenant, the company has a 24-hour rule for solving problems. If it is the type of issue that cannot be resolved in 24 hours, then the tenant needs to know within 24 hours when the problem will be solved.
Quarterly newsletter. First Industrial has a quarterly newsletter. Rollins said this type of communication is key because it will talk about a number of company initiatives that are important to the tenant. It also talks about space opportunities and highlights several First Industrial tenants. Tenants appreciate being spotlighted, according to Rollins.
New tenant package. Like many owners, First Industrial furnishes its new tenants with a new tenant package that talks about a property’s rules and regulations. In addition, it tells the tenants about the market, in case they are new to the area and furnishes them with emergency phone numbers. Rollins said that it helps start the relationship on the right foot.
Events for tenants. “First Industrial has an annual tenant relation plan which is different in each market because the tenants are different,” said Rollins. “In some regions, it’s an Ice Cream Day. In other regions, there are picnics.”
Rollins said that these events are not substitutes for face time with tenants, however. “It’s better to have relationships in smaller numbers where you can sit down with tenants and really listen to what is on their mind,” he noted.
Growing Tenants. First Industrial’s emphasis on developing relationships and tenant retention are aimed at its ultimate goal of having its tenants grow in a First Industrial building. Rollins talked about tenants in various markets who started off with a small chunk of space but over the years, these companies have bloomed and taken more space. “Listen to them and continually try to accommodate their needs,” he said.
For more information
First Industrial Realty