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The Urban Land Institute’s most recent commercial real estate survey has revealed the CRE market’s anticipated trajectory. CRE has benefitted from six consecutive years of growth, but the experts polled by ULI predict that it will taper off by 2017. The slower growth in property prices and rental rates won’t be dangerous, though, as survey respondents said that “better-than-average” operating fundamentals in most property types would still ...
Nonpayment of rent is the most common breach of a tenant’s lease—and can be a major signal that trouble is on the horizon. That trouble could come in many forms: A tenant becomes bankrupt or has financial issues, it withholds its rent because of a perceived problem that you’ll have to hash out, or it has found a better space and is preparing to move out despite its lease.
Q: I recently bought a building comprised of several commercial condo spaces. A restaurant tenant has expressed interest in one of the spaces, but I’m apprehensive. The space is subject to the governing documents of an association, and restaurant tenants have more hoops to jump through, such as getting approval for improvements that typical retail tenants don’t need, like gas lines.
Winter is approaching and with it will come snow, rain, and freezing conditions in some parts of the country. Some office building or mall owners put out “wet floor” signs during rainy or snowy weather to warn customers about slippery conditions that could quickly develop on the floors of the property. In just a few minutes, water can collect, creating a hazard.
In a perfect commercial real estate world, shopping center and retail leases wouldn’t be subject to variables that could negatively affect your profitability. In reality, inflation—which is impossible to predict with complete certainty—can affect your bottom line unless you and the tenant agree to use “rent escalation” to keep up with the market. This isn’t as simple as it sounds, though. There are s...
Amending your lease with a tenant can work in your favor if you can remove certain portions that would've worked against you if exercised by the tenant. But keep in mind that removing a clause dealing with one right doesn't make a related right invalid. You must expressly delete each provision when amending the lease. Otherwise, the provisions are still in effect.
If your tenant agreed to be accountable for any ADA infraction that’s discovered in its space in the future, you could still be on the hook for the same violation. But you can make sure that you find out about the violation while there’s still time for you to correct it if your tenant hasn’t, by requiring the tenant to inform you within 10 days of receiving an ADA notice.
Sometimes, leasing space to a tenant that is not a U.S. business or individual is profitable and the right choice for your property. But there are several key considerations that need to be addressed ahead of time in order for you to be protected in the event that things don’t work out in this type of scenario. Make sure that before you sign a lease with a foreign tenant you discuss with your attorney:
Most leases include a “cure period” during which a tenant has the opportunity to fix a problem that, if left unchanged, would be considered a breach of that lease. If you’ve allowed your tenant to have a cure period, you might be under the impression that it’s required to completely fix whatever is wrong. But that’s not always the case.
Square footage and dimensions can easily become the focus of a dispute, which is why some owners try to keep them out of a lease or attached floor plans. If you have to include square footage or dimensions in certain circumstances—for example, if you’re dealing with a highly desirable prospective tenant that demands this inclusion, or the fixed rent or a rent escalation is governed by a formula that includes the square foot...