As I looked into the eyes of a classroom of entrepreneurs last week I wondered what wisdom I could impart.
My first thought was, good on you. You’ve found a passion and you want to share it with the world!
My secondary thought was, awesome, here comes a commercial real estate agent ready to deflate all your hopes and dreams.
I jest.
But I have heard this comment before, so let’s get it out in the open and have a chat about it.
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Receiving that first response from a Tenant we’ve not encountered before, after waiting for their review of a lease, it is always interesting.
We represent both Tenants and Landlords; this article has been written from the perspective that I am representing the Landlord.
At times the Tenant is prepared to execute the document “as is” and at times they will request hundreds or more of changes. We have seen request that number exceed 1,000 changes.
We know all commercial real estate leases are written with a bias towards the Landlord, but what are the main reasons that Tenants object to the document?
As a commercial real estate agent my job is to line up tenants with landlords, and sellers with buyers.
Unlike a sale, where both sides part ways at the end of transaction, I think leasing is a lot about building a relationship.
However, much like in our personal lives, we all know some relationships are just not meant to be.
During my ten years in the commercial real estate industry, I’ve seen it all and very little surprises me anymore.
Every now and then however I get a new doozy worth sharing!
I’ve compiled a list of new and interesting ways that tenants have chosen to compromise their relationship with their landlord.
The lease is signed, you’ve moved in and you’re open for business.
Negotiations were tough but you were able to come to agreement with the landlord regarding the rate and term.
But the universe has thrown you a curveball. For whatever reason, you will not be able to complete the obligations of your lease agreement.
What do you do?
In an ideal universe tenants could plan ahead and leave themselves enough time to complete a comprehensive commercial real estate search.
They wouldn’t feel pressured to take space that isn’t quite right or doesn’t entirely suit their needs.
But it happens far too often in my world. Why?
Leases are created by landlords to protect their investments. They identify the rights and responsibilities for both parties during the term of the relationship.
Because in most cases the lease comes from the Landlord, he or she is going to be more aware of the clauses and ultimate implications. No one is trying to pull the wool over a tenant’s eyes, but there are items that are important to understand prior to entering into an agreement.
Research this topic and you’ll find many opinions and trending theories and on the most efficient and pleasing office environments. Contrary to what some of these theories may try and tell us, I don’t subscribe to the belief that one solution fits all.
There are some useful tips available that is worthwhile considering to help make informed business decisions.
We as agents often take for granted that Tenants and Landlords understand the terms that relate to leasing and selling commercial real estate. One such common clause is that of subleasing.
It’s important that both parties in the lease agreement understand the obligations and implications of executing a sublease.
Many commercial real estate leases will include an option to renew clause. Like all clauses in a lease, this one is bound by some pretty specific rules that have important consequences to both the landlord and tenant.
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