Pricing and Longstanding Vacant Units

In my last blog, I promised to talk a little more about longstanding vacant, so here we go. I am not an advocate of automatically reducing rents just because a unit has been vacant a while; and as discussed in a prior blog, I don’t recommend putting leasing bonuses on longstanding vacants.

Here’s what I do recommend:

1. GOYA! That stands for “get off your ass” by which I mean the first thing you should do is walk the unit. Is it truly sparkle ready? If there’s any blemish at all, fix it!
2. By GingOYA, you can also see if there’s something physical about the unit that makes it less attractive—back of the property, dark walkway, poor view, near the dumpster, …. If so, then a permanent adjustment by way of a negative amenity is probably the best solution
3. Take a look at the history of this unit as shown by your PMS. If the unit has been leased and canceled a couple of times, then it really hasn’t been on the market long. Sure, it’s been vacant 45 days, but if 33 of those were tied up by a lease that later canceled, then it’s really only been on the market 12 days.

Lastly, mini-model the unit. Let your team have some fun spending $50-100 at Pier One, Crate and Barrel, or whatever floats their boat. I’ve often been amazed at how quickly that “impossible to lease” unit moves as soon as there’s a bit of framing and excitement from a mini-model. And instead of lowering the rent further, how about just giving away the mini-model merchandise to whoever leases the unit? That’s a whole lot cheaper than a rent reduction!