Multi-tenant commercial real estate refers to properties that host multiple tenants within one building or complex. Designed specifically to accommodate and lease space to multiple businesses, organizations or individuals; tenants in multi-tenant real estate could include retail stores, offices, restaurants, medical clinics, co-working spaces and more.
Key characteristics of multi-tenant commercial real estate properties:
Diverse Tenants: Your property hosts tenants from various industries or sectors, providing more customers and clients for your area. This diversity can help draw potential tenants.
Shared Facilities: Some amenities or facilities may be shared among tenants, such as parking areas, common lobbies, elevators, restrooms and common areas.
Lease Agreements: Each tenant typically enters into an individual lease agreement with their property owner or management company, detailing duration, rent amounts and any special conditions applicable.
Property Management: Real estate properties typically employ a management team to oversee daily operations, maintenance, and tenant relations.
Location: Commercial properties designed for multi-tenants should be placed in areas with heavy foot traffic and good accessibility to attract tenants and customers alike.
Rental Income: Property owners generating rental income from multiple tenants often experience more stable and secure income streams compared to single-tenant properties.
Tenant Mix: When carefully balanced, tenant mixes can foster synergy among businesses that will attract more people to the property and benefit all tenants involved.
Commercial real estate properties with multiple tenants include shopping centers, office buildings, strip malls, industrial parks and mixed-use developments. Such properties offer multiple tenants the benefit of spreading risk among themselves through different areas, so vacancies in one area may be offset by income from elsewhere. Unfortunately, they also present challenges related to managing different tenant needs, maintaining common areas and creating positive tenant experiences. Investors of multi-tenant commercial real estate strive to establish properties that attract and retain tenants, thus optimizing rental income and property value.
Founded in 2001 by Richard Crenian, ReDev Properties is a leading real estate investment management firm with an exceptional track record of successfully owning, developing and managing over $2.5 billion in real estate properties across Canada.