Send Tenants Lease Renewal Reminders

It’s easier and cheaper to retain existing tenants than to seek out new ones, especially in a weak economy. But what can you do if a good tenant fails to exercise its renewal option by the lease deadline?

            There are several reasons why the tenant may not have exercised its renewal option by the lease deadline—for example, it may be planning to renew, but may have simply forgotten to send its renewal notice.

            One way to help encourage tenants to renew is to send them a reminder letter of their upcoming lease expiration date. A nonthreatening letter is a useful marketing tool that can encourage a good tenant to renew. The letter can explain to the tenant that it will trigger certain lease obligations—financial and otherwise—if it chooses to let its lease expire.

            There are several benefits to sending a tenant a reminder letter. They include:

• Alerting a nonrenewing tenant to what might have been a mere oversight.
• Encouraging a tenant to rethink its decision not to renew by highlighting the obligations triggered by the expiration of the tenant’s lease, such as restoring and repairing the space and paying holdover rent if it stays in the space beyond the lease termination date.
• Opening a dialogue with a tenant that’s on the fence about relocating to a new space.