How can you be sure that your landlord is really paying his bill? What if he were not?
What important tips do you need to know regarding commercial real estate data and what a good broker can do for you?
In this months issue we discuss all of that and provide other great tips!
Click here for the November 2009 Edition to the Tenant Buyers Bottom Line Secrets!
A question I am often asked with respect to leasing commercial property is how one can know if the landlord is paying his bills.
Think about it for a second, if the landlord fails to pay his mortgage, taxes, utility bills or any similar related expense, those vendors who have not been paid can (and will) take legal action. That action can be anything from foreclosure, to disconnection of services.
So what can a tenant do?
Enter a good real estate attorney. Assuming the tenant used a tenant rep broker to assist him with the transaction, that broker would have negotiated important lease terms in the form of a request for proposal and received a written answer. The mechanisms in that letter would state how the final lease should be prepared in order to protect that tenant.
Once the broker received the lease which was drawn using the business points negotiated in the request for proposal letter and it response, he would have made informal lease comments and incorporated them with the comments of the tenant. These comments are then given to the tenants real estate attorney for proper legal review and manipulation.
I have NEVER been through that process with a tenant where important lease terms did not need to be changed. It is at this point where the real estate attorney will ensure that the necessary protection is in that lease document prior to signing.
If the landlord will not accept these important changes, then the good tenant broker will have an alternative property to consider before making their final decision.
This process is important given the economic environment today. How bad would it be for the tenants business to get locked out of the property until payments can be brought current?
One common misconception when it comes to commercial real estate data is it availability. Unlike residential property listing data, the commercial data remains fragmented with respect to aggregating it to the public.
Our local residential board recently signed agreements to aggregate its data to all of the major real estate portals around the Internet.
The local commercial database still does not contain all of the all of the available properties. Local brokers use approximately four different databases to post their information. The unfortunate fact is that some of these databases cannot be accessed by the public. Or if they can, not all of the information can be accessed.
It is unlikely that this trend will change any time soon in this market. Aside from the major benefits and value commercial brokers bring to their clients, access to data is still a big benefit unlike the residential side.
Any broker representing a tenant or buyer of commercial real estate must spend a lot of time compiling a complete list of properties, polling local commercial brokers for their data and cross checking their lists before presenting them to their client. This time commitment is among many reasons why good commercial brokers require written brokerage agreements prior to engaging in that effort.
It is worth while to review the agency types here in North Carolina and what can be expected by buyers and tenants. They are located here at the links below.
If one takes the time to carefully review this and discuss this with a good broker, it is easy to see that it would be foolish to participate in the transaction (especially on the purchase or tenant side) without the assistance of a broker. In many cases, buyers and tenants end up paying nothing with the dust settles.
I suggest finding a buyer or tenant broker that you like in order to provide the valuable services.
Site Selection magazine recently ranked North Carolina No. 1 in the country for its business climate, followed by Texas, Virginia, Ohio and Tennessee. The magazine cites new high-tech development and North Carolina’s technology-focused academic centers as strengths for business growth.
http://takeaction.realtoractioncenter.com/ct/tdLZIdY1ALAp/
Real estate costs are one of the single biggest overhead items for most commercial tenants. Yet tenants are commonly advised by landlord brokers with serious conflicts of interest — fiduciary obligations to help landlords maximize lease costs. The result has often been transactions which aggravate costs, embarrass executives and sometimes even sink a company. The toughest part of securing a good deal isn’t finding the right location, since landlords are obviously eager to let all brokers know about their available space and rent it as soon as possible. Rather, the toughest part of securing a great deal is negotiating the lease. A badly-negotiated lease can turn a great location into a terrible liability. Do not make this mistake, especially in this economic climate. Get HELP
Click Here for the October 2009 Edition
