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In my years as a commercial real estate specialist, I’ve noticed that the tenant offering the most rent isn’t always the one you want to sign. It’s easy to get excited when someone is willing to pay above asking. Every property owner wants to maximize income. But I’ve learned that the better question is whether that business is likely to succeed.
A few years ago, New York saw an explosion of smoke shops. They seemed to appear on every block, and many landlords were receiving aggressive offers from operators eager to secure space. Today, many of those locations are vacant again.
The issue wasn’t simply the type of business. It was the pace of the market. When an industry grows that quickly, it’s worth asking whether the demand is sustainable.
That’s why I encourage property owners to think beyond the first lease. Who is going to be operating in your building five or ten years from now? Is this a business with a solid foundation? Do they understand their industry? Do they have the financial resources to weather challenges? Are they opening because they’ve built a successful business, or because they’re chasing a trend? Those questions matter just as much as the rent they’re offering.
When I represent landlords, my goal isn’t simply to fill a vacancy. It’s to help place a tenant who has the best chance of building a successful business in that location.
That means understanding their business model, reviewing financial information, evaluating their experience, and having honest conversations about whether the space is truly a good fit.
Of course, no one can predict the future. Good businesses sometimes struggle, and unexpected challenges happen.
But I’ve found that taking the time to thoroughly evaluate a tenant from the beginning usually leads to better outcomes for everyone involved.
A stable tenant creates value far beyond the first lease payment. For most property owners, that’s the investment that matters most.
Curious, what are your thoughts on this?
xoxo,
Cyn
