Avoiding mistakes that cost you time, money, and good tenants
One of the biggest mistakes we see commercial landlords make is assuming any tenant is better than no tenant. We understand—vacancy hurts. But a poorly thought-out leasing decision can hurt a lot more in the long run.
At McGees Property Brisbane, we have seen plenty of cases where one new tenant ends up driving two others out. The car park gets clogged. The complaints start rolling in. Reputations take a hit. And before long, that "quick win" becomes a long-term headache.
That is why tenant mix is not just a leasing decision—it is a management strategy. Get it right, and your asset performs. Get it wrong, and you are stuck fixing problems that should not have been there in the first place.
Let us break it down by property type.
Retail Centres: Think Synergy, Not Just Rent
Retail is probably where tenant mix matters most. It is not just about who is paying the rent—it is about how their business fits with the others around them.
An example of this was our appointment to a strip retail centre where the previous landlord had leased to two Chinese takeaways in the same strip side by side. Neither survived six months. It is not about the food—it is about over-saturating the same offering. It splits the customer base and hurts both operators.
Another common issue? Multiple nail salons and hairdressers. Sure, they could be low-risk in respect to rent arrears, but their staff and regular clients park on site in customer bays for hours on end. That is a problem when your café tenant loses customers because there is nowhere to park for a quick coffee.
Fitness centres are another one. Great for activating a centre, but only if the car park can handle the rush. If you have got early morning gym goers fighting for parks with trades people picking up breakfast, you have got trouble.
Our advice:
Look beyond the tenancy schedule. Think about how tenants impact one another. Complementary uses bring synergy. Conflicting ones bring churn.
Industrial: Know What’s Happening Behind the Roller Door
Just because it is a warehouse does not mean tenant mix does not matter. In fact, it matters a lot.
We have seen “clean” operations—think pick-and-pack, ecommerce logistics—sitting next to a spray painter or a panel beater, and it never ends well. The noise, the smell, the environmental risks—it affects neighbouring tenants and the long-term condition of the property.
A recent property management appointment had a tenant storing industrial chemicals without proper bunding. Fumes started creeping into the next tenancy. That led to complaints, potential lease exits, and a remediation cost that was not in anyone’s budget.
Our advice:
Ask the right questions before signing. What are they storing? Any hazardous materials? How often are trucks coming and going? Are they stacking pallets to the ceiling? These details matter.
Office Buildings: Keep the Harmony
Office buildings may seem straightforward, but the wrong mix can upset the building community.
Imagine a professional services firm—say, an accounting or law office—sharing space with a training college. Different cultures, different hours, different levels of wear and tear. Suddenly your bathrooms are being used 12 hours a day, lifts are packed at odd times, and the lobby feels more like a university campus than a corporate address.
Then there is mixing medical with general office. Sounds harmless until a solicitor’s client is sharing a lift with someone coughing and wheezing. People notice that stuff. And perception matters.
Our advice:
Group similar uses where possible. Understand peak times. Think about how shared facilities will cope. Office tenants do not complain loudly—but they do quietly leave when the vibe changes.
Medical Suites: High Maintenance, High Return
Medical tenants are usually highly sought after—long leases, expensive specialised fit-outs, low tenant turnover. But they come with strings attached.
Dental surgeries, for instance, need reinforced plumbing. General practitioners might need backup power for vaccines. Allied health might need more hot water or specialised waste services. Many of these uses require local authority approvals. Ignore these details and you will be doing costly retrofits down the track.
Our advice:
Do your homework. Set up the tenancy properly. If you do, they will likely stay for many years. We have got medical tenants in our portfolio that have not moved in two decades.
Do Not Ignore Online Reputation
One thing landlords often overlook when considering potential tenant quality? Google reviews. Yes, they matter.
We took over the management of a building where the only online feedback was a string of one-star reviews—slow repairs, broken lights in the car park, nobody returning calls. Not exactly a glowing recommendation for the next prospect.
We fixed the issues, improved response times, and followed up with tenants. The reviews improved—and guess what? So did enquiry levels and occupancy timeframes.
Our advice:
Monitor your property’s online presence. Respond to feedback. It is part of the game now, whether we like it or not.
Lease Expiries: Do Not Let the Dominoes Fall
One more thing we always check—how lease expiries are spread out. We have seen portfolios where half the tenants are due to expire within the same quarter. That is a serious risk, unless of course you are intending to redevelop the property.
If they all provide notice, your income is compromised. Even if just a couple vacate, your property takes a hit, and you are suddenly in reactive mode.
Our advice:
Spread out lease expiry dates to maintain flexibility. This helps ensure consistent cash flow and minimises the risk of financial stress.
This Is What We Do
At McGees Property Brisbane, we are not just about collecting rent. We manage assets. And that starts with understanding how tenant mix drives performance.
We know what works. We have seen what does not. And we are not afraid to ask the hard questions to protect your investment.
If you want a management team that takes a proactive, experienced, and strategic approach to your property—not just filling space for the sake of it—get in touch. We would be happy to have a chat.
For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.
Liability Limited by a Scheme approved under Professional Standards Legislation