Tenant Feedback Matters! How we saved a client $400,000+ in less than a week :)
I wanted to share a story from an assignment our team at Tenavox just recently completed. We were engaged to complete Tenant interviews by the purchasers of an office asset in Houston, Texas for the purposes of finding out any potential holes in management, services or coordination of issues that may arise should the purchaser’s move ahead. Tenavox was engaged due to our unique ability to glean this feedback (being a Tenant-focused, unbiased source helps) as third-party we could provide some real color along with our experiences in CRE in order to help the purchasers driver their decision making on the potential investment.
The results of our engagement were eye-opening and proved critical to the investors ultimate purchase. Here’s what we found:
The purchaser’s had originally asked the LL for access to the Tenancy but were finding it difficult to coordinate, for some reason the meetings with Tenants kept getting pushed. Our first efforts were meaningful, meetings proved easier to schedule and we found Tenants were more than willing to chat with us, as opposed to a potential investor/buyer or the current ownership.
In some cases we can feel like therapists. It turned out the current Tenancy had quite a bit to say about the management and current ownership but did not want to risk any recourse or potential blowback from their feedback. Our protected and secure communication where we make Tenants comfortable by guaranteeing their anonymity in responses immediately broke down this barrier. What was impossible to collect for current (or future) ownership/management due to these fears became possible.
We listened intently while asking questions that were crafted specifically to help the purchaser’s glean what was most important. We were helping them understand what capital improvements needed to take place, what parking issues and signage concerns there were, most importantly what it would take to retain this tenancy for the long-term. We knew this could help our client and the Tenants.
Feedback is a win-win scenario if you listen!
After listening and gathering this information from the Tenancy, we made a list of several core findings to the purchaser.
- Current management was too hands off, responsibility and accountability were not evident and responsiveness was a key improvement that needed to be maintained.
- Although they liked their spaces as a whole, small things like reorganizing internal signage, adding a Fedex box and water coolers to common areas would be viewed as real positives by the Tenants (at negligible costs!)
- Some spaces experienced major HVAC issues, with new units not cooling appropriately. The restrooms and lighting were not acceptable to the Tenants either. Even though the current ownership had spent a lot of money to upgrade them they had done so without the input of the people who use them everyday, mechanical engineering was put above practical use, costs above functionality and the Tenants were quite unhappy. These problems were self-inflicted and costly!
- If these problems were not taken care of the rent roll would not matter, Tenant's were willing to leave over this lack of satisfaction as their leases came up for renewal.
Needless to say...NONE of this was in the due diligence documentation of the current ownership. NONE of this made it into the lender ordered inspection or appraisal either. Tenavox was the only group who had found this out. So what did we do? Well we made recommendations guided by this feedback.
The purchaser was able to negotiate a $450,000 price reduction based upon the information we found and our guided recommendations...and the satisfaction of the Tenants, major improvements are now priced into the purchase and Tenants will be happier.
This was a $15M+ initial purchase price (big numbers!)
The current owners had no idea this was happening (they were out of the US, and blamed most of the issues on lack of communication between current management and their US contact). Our clients (the purchaser's who ultimately closed this deal) were extremely pleased (as was their lender) and have engaged us to come back and discuss with the Tenants 6 months from now, once the improvements have been completed.
We’re excited to share a real use-case of how listening and learning from commercial Tenants can drive critical decisions in commercial real estate. Some of you may be able to collect some of this info, and some of you are collecting some of this now, but we assure you, the level of feedback and data Tenavox delivers is the best in the industry.
I'm extremely proud of our team, and Tenant feedback is not a trend or a fad, it's the difference between your building being successful...or not.
We completed our Tenant interviews in less than a week (9 Tenants) for less than $2,000 and our ROI was over 2200%. If you’re interested in leveraging our industry-best collection methods to drive better decisions in your commercial assets we're ready to help.
Start benefitting from our exclusive Tenant Feedback today.
Contact Josh@Tenavox.com or fill out the form below to get started today.
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