How to Position Your Building Against the Competition: A Leasing-Focused Guide for Commercial Property Owners

27 minutes ago

5 min read

In today's commercial real estate market, simply having available space is not enough to attract tenants. Property owners need to understand how their buildings compare to competing options and what makes their property worth considering.

A building does not compete against every property in the market. It competes against the handful of buildings that prospective tenants are actively touring and evaluating.

Strong competitive positioning starts with understanding how a property compares in terms of rental rates, operating expenses, condition, amenities, accessibility, and leasing incentives. When ownership and the leasing team understand these differences, they can make more informed decisions about pricing, improvements, and marketing strategy.

"Strong positioning does not mean claiming the building is best at everything. It means knowing where the property can win and making that advantage easy for the market to understand." — Andrew Jameson

Why Competitive Positioning Matters to Leasing

Prospective tenants rarely evaluate a property in isolation. They compare multiple options, weighing not only rental rates but also the overall experience, functionality, and financial implications of each building.

A property that appears competitive on paper may still struggle to generate interest if its vacant suites feel outdated, its operating expenses are higher than comparable buildings, or its advantages are not being communicated effectively.

Understanding the competitive landscape allows ownership to direct capital toward improvements that matter, establish realistic leasing expectations, and give brokers a stronger story to present to prospective tenants.

As owners evaluate their property's position in the market, several questions should be considered:

Which buildings are prospective tenants actually comparing with ours?
How does our total occupancy cost compare to those alternatives?
What objections are consistently coming up during tours?
What improvements or advantages could help differentiate our property?

Answering these questions creates a foundation for a more effective leasing strategy.

Six Components of Competitive Building Positioning

A comprehensive competitive review should go beyond comparing asking rental rates. Owners should evaluate the factors that influence a tenant's decision and identify where their property has an advantage or may need improvement.

1. Identifying the Correct Competitive Set

The first step is determining which properties truly compete with your building.

While nearby buildings are a logical starting point, proximity alone does not define the competitive set. Owners should consider location, building quality, available suite sizes, parking, tenant profiles, and the properties prospects are most likely to tour.

A well-defined competitive set provides a more accurate picture of where a building stands in the market and helps ownership avoid making pricing or capital decisions based on irrelevant comparisons.

2. Rent and Total Occupancy Cost

Asking rental rates are only one part of a tenant's financial decision.

Operating expenses, property taxes, utilities, parking charges, and potential concessions can all influence the total cost of occupying a space. Two buildings with similar asking rents may have significantly different overall occupancy costs.

Owners should evaluate these expenses alongside available leasing incentives to understand how their property's economics compare.

Maintaining competitive occupancy costs can be an important advantage, particularly when prospective tenants are evaluating buildings with similar locations and amenities.

3. Building Condition and Tour Experience

First impressions play an important role in the leasing process.

The experience begins before a prospect enters the building. Parking areas, landscaping, signage, building entrances, and common areas all contribute to how a property is perceived.

Once inside, the condition of lobbies, restrooms, hallways, and vacant suites can influence whether a prospect sees the building as a realistic option.

Owners should periodically walk their properties from a prospective tenant's perspective and identify improvements that could enhance the overall tour experience.

Not every improvement requires a significant capital investment. Cleanliness, lighting, updated signage, and well-presented vacant suites can help create a more positive impression.

4. Access, Parking, and Amenities

Location remains an important consideration, but tenants also evaluate how a building supports their daily operations.

Highway accessibility, commute patterns, parking availability, nearby restaurants, conference facilities, fitness amenities, and the overall visitor experience can all influence leasing decisions.

A building may not offer every amenity available in the market, but it may have specific advantages that are particularly valuable to certain tenant profiles.

Understanding which features matter most to prospective tenants allows the leasing team to emphasize the building's strengths rather than relying on a generic list of amenities.

5. Leasing Concessions and Delivery Timing

Competitive leasing terms extend beyond the advertised rental rate.

Free rent, tenant improvement allowances, turnkey buildouts, and speculative suites can materially affect a prospect's decision.

Delivery timing is equally important. A property that can accommodate a tenant's schedule or provide move-in-ready space may have an advantage over a competing building that requires extensive construction or a lengthy approval process.

Owners should understand the concessions available at competing properties and establish realistic expectations for improvement packages, approval timelines, and delivery dates.

Having a clear leasing strategy in place can help ownership respond more efficiently when opportunities arise.

6. Tenant Fit and Market Messaging

Not every building is the right fit for every tenant.

A property's location, layout, amenities, economics, and overall character may appeal more strongly to certain types of businesses.

Rather than attempting to position the building as the best option for everyone, owners should identify the tenant profiles their property serves best.

The leasing team should then be able to communicate one or two clear, defensible advantages that distinguish the property from its competitors.

When the market understands where a building fits and why it deserves consideration, brokers can communicate its value more effectively.

What to Review Before Changing Your Building's Positioning

Before lowering rental rates, approving major improvements, or changing a property's marketing strategy, ownership should complete a thorough review of the building's competitive position.

This process should include current asking rents and operating expenses at competing properties, available concessions, suite conditions, parking and amenities, and expected delivery timelines.

It is equally important to review recent leasing activity and feedback from brokers and prospective tenants.

Repeated objections can provide valuable insight into why a building may be losing opportunities. If prospects consistently mention outdated finishes, limited parking, or high occupancy costs, ownership can begin identifying potential solutions.

Owners should also confirm that marketing materials accurately reflect the property's current availability, condition, and competitive advantages.

The goal is to distinguish between a true market disadvantage and an execution issue that can be addressed without significantly changing the building's economics.

Common Competitive Positioning Mistakes to Avoid

One of the most common mistakes property owners make is comparing their building to the wrong properties. A broad market comparison may overlook the handful of alternatives that prospective tenants are actually considering.

Another mistake is focusing exclusively on asking rental rates. Operating expenses, parking costs, improvement allowances, and delivery timing can all change the financial comparison.

Owners should also avoid relying on too many generic selling points. A clear message highlighting one or two meaningful advantages is often more effective than an extensive list of features that competing buildings also offer.

Ignoring recurring prospect feedback can be equally problematic. When the same objections appear repeatedly, they may point to an issue with condition, pricing, or the leasing process.

Finally, reducing rental rates should not automatically be the first response to limited leasing activity.

Outdated marketing materials, poorly presented suites, inadequate signage, or slow approval processes can create unnecessary leasing challenges even when a building's economics are competitive.

Addressing these issues may improve a property's marketability without immediately sacrificing rental income.

Position Your Building to Compete

Successful leasing requires more than competitive pricing. It requires a clear understanding of the market, the property's strengths and weaknesses, and the factors that influence tenant decisions.

Owners who regularly evaluate their competitive position can make more informed capital decisions, respond to market feedback, and help their leasing teams communicate a stronger value proposition.

The objective is not to make every building the best option for every tenant. It is to understand where the property can compete most effectively and ensure those advantages are recognized.