I’ll say it plainly. Contractors are my favorite tenants. HVAC guys, electricians, plumbers, landscapers, painters, roofers. These are the people who fill flex parks across the Carolinas and they’re the reason these buildings perform so well.
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Current Tenant Types: Do you have contractors, retail, office, or a mix? -
Rent Premium: Are contractor tenants paying at or above market per-SF rates? -
Lease Terms: Are contractor leases 3, 5, 7, or 10+ years? Longer terms are better. -
Specialized Needs: Do contractors need specific specs (high ceiling, three-phase power, truck parking, dock access)? Do you have those?
They need the space
A contractor can’t run their business from home. They need a shop for their trucks, equipment, and materials. They need a small office for dispatch and paperwork. They need somewhere to park their fleet overnight. A flex bay with a roll-up door and 1,500-3,000 SF checks every box.
Identifying Strong Contractor Tenants
Not all contractors are equal. Buyers prize these attributes in contractor tenants:
- Established local business (3+ years in area, strong reputation, growth trajectory)
- Multiple trucks/vehicles (indicates 5-10 person operation, not one-person shop)
- Longevity in space (3+ years in building suggests fit and stability)
- Written lease (5+ years preferred, not month-to-month arrangements)
- Business credit and payment history (verified through landlord references, not just word-of-mouth)
And unlike a tech startup that might work remotely or a retailer that might go online, a contractor will always need physical space. You can’t route ductwork from a laptop. That’s as recession-resistant as it gets in commercial real estate.
They stay
Average tenure for a contractor tenant in my experience is 4-6 years. Many stay longer. They don’t want to move because their customers know where they are, their employees know the commute, and moving is a hassle when you’ve got a shop full of tools and inventory. Low turnover means less vacancy, less TI spend, and more predictable income.
They pay on time
Service contractors in the Carolinas are busy. The construction boom, the population growth, the aging housing stock that needs repairs. These businesses are making money. I have flex tenants in Greenville and Charlotte who have never missed a rent payment in five years. That’s not unusual.
The risk
There’s always some risk. A contractor with two employees and one truck is more vulnerable than one with 15 employees and a fleet. I look at the size and stability of the tenant’s business, not just the lease. A general contractor who does $3M in annual revenue is a very different credit profile than a handyman who just got started.
For sellers
Seller takeaway
Contractor tenants are your strongest asset in flex. If you own a flex building with strong contractor tenants on long-term leases, you’ve positioned the property for premium value. Call Roth Capital at 704-600-3839 to learn what your tenant mix is worth.
If your flex building is full of established contractors on real leases, you’ve got one of the most desirable assets in the Carolinas right now. These buildings trade at strong cap rates because buyers know the income is reliable. Want to know what yours is worth? 704-600-3839.
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