Posted by justtryingtohelp on November 10, 2008 at 11:38:19:
In Reply to: How to raise rents for office tenants posted by Patrick on November 05, 2008 at 05:04:20:
It's sounds like they don't have many other options. Small cities in WV are just that - small. What's your competition? What's market rent for office space similar to yours? How long to fill a vacancy if a tenant leaves? It sounds like a city where everybody knows everybody. You should be able to get a feel for the market relatively easy. I would definitely include graduated rent increases in all your future leases so these awkward situations don't occur.
Bottom line is this - if you are charging true market rent your tenants probably won't leave. Threatening to leave is not the same as leaving. The concept of substitution applies here - will your tenants find a better space for the same rent? If you're above market rent then they might leave if they can. If you're below market rent they'll probably stay but you are not maximizing your potential profit.