The following post is copyrighted by Austin Tenant Advisors - . As you search for retail space you will find that landlords operate their retail shopping centers differently. Meaning they don’t all do the same thing. That is why it’s important to understand the nuances of how each landlord manages their retail center, what costs they are responsible for, what costs tenants responsible for, etc. To help get you started below are a few questions to ask landlords when leasing retail commercial real estate.
These are just a few of the questions you should ask landlords when renting retail space. If you have any questions or would like help searching for retail space in Austin, Tx feel free to give us a call at 512-861-0525 The post Questions to Ask Landlords When Leasing Retail Space appeared first on Austin Tenant Advisors. via Blogger Questions to Ask Landlords When Leasing Retail Space
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The following post is copyrighted by Austin Tenant Advisors - . As you search for retail space you will find that landlords operate their retail shopping centers differently. Meaning they don’t all do the same thing. That is why it’s important to understand the nuances of how each landlord manages their retail center, what costs they are responsible for, what costs tenants responsible for, etc. To help get you started below are a few questions to ask landlords when leasing retail commercial real estate.
These are just a few of the questions you should ask landlords when renting retail space. If you have any questions or would like help searching for retail space in Austin, Tx feel free to give us a call at 512-861-0525 The post Questions to Ask Landlords When Leasing Retail Space appeared first on Austin Tenant Advisors. via Tumblr Questions to Ask Landlords When Leasing Retail Space The following post is copyrighted by Austin Tenant Advisors - . There will be times when your business needs to vacate a commercial space before the existing lease expires. There are a number of reasons why this might be necessary including going out of business, selling the business, or you need to expand and lease more space however the existing building cannot accommodate your needs. Whatever the case it’s difficult to predict the future so it’s important that you negotiate as much flexibility in your commercial lease as possible in the beginning. In the event business conditions change whether good or bad one way to mitigate your commercial lease obligation is by negotiating a sublease and assignment clause. You may not think this is important however you don’t have any control over the future business climate. Subleasing and Assignment are not the same thing. Assignment Clause in a Commercial LeaseWith an assignment the original tenant may get sell a portion or all of the shares of their business and want to grant the obligations and rights of the commercial lease to the new partner or business owner. The assignment essentially removes the original lease guarantor off the lease and they are have no further obligations. The new entity takes over all obligations of the lease. This situation is more risky for landlords since they don’t know the background, financial strength, or reputation of the new entity. In most situations IF a landlord agrees to the lease being assigned they will ensure that the new entity has financials that are at least as strong or better than the original tenant. They also will want to ensure that the new entity fits into the existing tenant mix and does not conflict with any exclusivity clauses. What you will find is that many landlords will not release an existing tenant from the lease obligations even if the landlord agrees to the assignment. In most cases the original tenant will still be on the hook with the landlord and have to secure a guaranty themselves from the new entity. Sublease Clause in a Commercial LeaseWhen subleasing commercial space the original tenant finds another company to sublease a portion or all of their space, however the original tenant remains contractually bound to the lease. Meaning if the sublessee does not pay rent or defaults the landlord can go after the original tenant to collect rent or damages. A sublease situation is less risky for a landlord. There are many advantages & disadvantages of subleasing commercial space. Example Assignment and Sublease Clause Commercial Real Estate Lease(a) Tenant shall not sublet or assign all or any part of this Premises or allow the Premises to be used or occupied by others (any such event being referred to herein as a (“Transfer”), or mortgage or otherwise encumber its leasehold estate under this Lease or its property within the Premises, without written consent of Landlord, which will not be unreasonably withheld subject to Section 9.1 © below. (b) Tenant shall give Landlord at least sixty (60) days’ advance written notice of any proposed Transfer, stating the anticipated terms thereof and all relevant information on the proposed transferee requested by Landlord. Landlord shall then have a period of thirty (30) days following receipt of such notice within which to notify Tenant in writing that Landlord elects to either (i) to terminate this Lease as to the space so affected, in which event Tenant shall be relieved of all obligations hereunder as to such space arising from and after such date, (ii) consent to the proposed Transfer, or (iii) refuse consent on reasonable grounds as set forth Section 9.1 © below. © Landlord shall not unreasonably withhold its consent to a proposed Transfer provided all of the following conditions have been met: (i) Tenant is not in default under the Lease, (ii) the nature and character of the proposed transferee, its creditworthiness, business and activities or its intended use of the Premises are consistent with the standards of the Building in Landlord’s sole judgment, (iii) the proposed transferee (or any of its affiliates) is not then a tenant of any part of the Building or a party Landlord is then negotiating to lease space within the Building, (iv) the rental to be paid by the proposed transferee is not equivalent to the then market rate for similar space in Austin, Texas, (v) the proposed occupancy would not impose an extra burden upon the Building systems or Landlord’s ability to provide services to the other tenants of the Building, (vi) the granting of such consent would not constitute a default under any other agreement to which Landlord is a party or by which Landlord is bound, including, without limitation, any exclusives previously granted to other tenants of the Project and any restrictions on leasing contained in any other leases of space in the Building, (vii) the proposed transferee is not a governmental agency or an entity with diplomatic immunity, or (viii) the requested assignment or sublease does not modify the Lease or the rights, obligations, or liabilities of either Landlord or Tenant under this Lease. Tenant acknowledges that the foregoing conditions are a reasonable basis for Landlord to withhold its consent to a Transfer and that if all of the foregoing conditions are not satisfied, Landlord may withhold its consent to a proposed Transfer in Landlord’s sole and absolute discretion. (d) If Landlord consents to a Transfer, Tenant agrees that all Rent amounts and other consideration payable to Tenant in respect of the Transfer in excess of the Rent for the Premises or the portion thereof subject to the Transfer shall be paid to Landlord as Additional Rent hereunder immediately upon Tenant’s receipt thereof after deduction for all reasonable brokerage commissions and tenant improvement allowances actually paid by Tenant in conjunction with such Transfer, or at Landlord’s option such payments can be made directly to Landlord by such sublessee or assignee. Tenant acknowledges and agrees that, notwithstanding Landlord’s consent to any Transfer, Tenant shall remain directly and primarily liable for the performance of all the obligations of Tenant hereunder (including, without limitation, the obligation to pay all Rent). In addition, Landlord may condition its consent to any assignment upon Tenant’s execution and delivery of a guaranty of the Lease in form and substance acceptable to Landlord. The consent by Landlord to any Transfer shall in any manner not be considered to be a consent to a use not permitted under Section 1.5(a). Any consent by Landlord to a particular Transfer shall not constitute Landlord’s consent to any other or subsequent Transfer. In furtherance of the foregoing, but not in limitation thereof, the acceptance by Landlord of the payment of Rent following any Transfer prohibited by this Article IX shall not be deemed to be a consent or approval by Landlord to any such Transfer, nor shall the same be deemed a waiver of any right or remedy of Landlord hereunder as a result thereof. (e) If Tenant is a partnership or limited liability company, a withdrawal or change, whether voluntary, involuntary or by operation of law, of partners or members owning as of the date hereof a controlling or majority interest in Tenant shall be deemed a voluntary assignment of this Lease subject to the provisions of this Section 9.1. If Tenant is a corporation, any merger, dissolution, reorganization of Tenant, or the sale or transfer (whether by way of one or more sales or transfers) of the controlling or majority interest as of the date hereof in Tenant’s capital stock shall be deemed a voluntary assignment of this Lease and subject to the provisions of this Section 9.1. Assignment & Sublease Clauses Are Important to Your BusinessAgain at the end of the day it’s difficult to predict what will happen with your business 3-5-10 years from now, even if you have the best intentions. There are many ways to negotiate flexibility into your commercial real estate lease and getting the ability to assign or sublease will help. It’s important that you have some sort of right which will not unreasonably be withheld to sublease or assign your space to another company or if you sell a new owner. The post Why Your Commercial Real Estate Lease Needs Assignment and Sublease Clauses appeared first on Austin Tenant Advisors. via Tumblr Why Your Commercial Real Estate Lease Needs Assignment and Sublease Clauses The following post is copyrighted by Austin Tenant Advisors - . When renting commercial retail space IN ADDITION to paying pre-negotiated base rents Tenants are also responsible for paying their pro-rata share of triple net charges (NNN). Triple nets are the taxes, insurance, and common area maintenance charges that Landlord’s pass 100% of the costs to Tenants. The common area maintenance (CAM) charge is one of the net fees charged to Tenants in a commercial retail triple net (NNN) lease mainly consists of the maintenance fees for work done on the retail property’s common area. Each tenant is only responsible for their prorata share which is the percentage of the tenants rented space vs the total square footage of the property. Common Area Maintenance Charge Definition in Retail Lease ContractsBelow is an example of how you will typically see common area maintenance charges defined in a retail space commercial lease contract. In addition to the rents and other charges prescribed in this Lease, Tenant shall pay Tenant’s proportionate share to Landlord all of the costs of operation and maintenance of the Common Area (“CAM”) which may be incurred by Landlord in its discretion. CAM shall include, without limitation, all sums expended in connection with: service and maintenance contracts, including, without limitation, windows and general cleaning, removing of snow, ice, debris and surface water, security police (if and to the extent Landlord provides security), electronic intrusion and fire control and telephone alert systems; machinery and equipment used in the operation of the Shopping Center; storm, sanitary and other drainage or detention systems, sprinklers and other fire protection systems, irrigation systems, and electrical, gas, water, telephone and other utility systems; off-site improvements (including off-site detention areas, drainage and detention ponds, landscaping and traffic signals), and the costs incurred by Landlord for maintenance and operation of and/or contributions to such costs maintained by others for any offsite improvements serving the Shopping Center; traffic regulation, directional signs and traffic consultants; permits, program services, and loudspeaker systems; paving, curbs, sidewalks, walkways, roadways, roofs, parking surfaces (including repaving, sealing, striping and patching); lighting facilities; signage; all costs and expenses allocable to any Declaration of Easements, Covenants, Conditions and Restrictions filed against the Shopping Center as amended from time to time (the “ECR”); margin taxes; the cost of compliance with any accessibility statute including, without limitation, the Americans With Disabilities Act and the (State) Accessibility Standards); all costs and expenses of water or other common utilities; uniforms, supplies and materials used in connection with the operation and maintenance of the Shopping Center; advertising, seasonal decorations, whatever management fee Landlord pays to the manager of the Shopping Center, CAM fees, an administrative fee equal to fifteen percent (15%) of CAM, and a reasonable allowance for Landlord’s overhead costs and the cost of any insurance for which Landlord is not reimbursed pursuant to Section 6.2, but specifically excluding all expenses paid or reimbursed pursuant to Article VI. In addition, although the roof(s) of the building(s) in the Shopping Center are not literally part of the Common Area, Landlord and Tenant agree that roof maintenance, repair and replacement shall be included as a common area maintenance item to the extent not specifically allocated to Tenant under this Lease nor to another tenant pursuant to its lease. With regard to capital expenditures (i) the original investment in capital improvements, i.e., upon the initial construction of the Shopping Center, shall not be included and (ii) improvements and replacements, to the extent capitalized on Landlord’s records, shall be included only to the extent of a commercially reasonable depreciation or amortization (including interest accruals commensurate with Landlord’s interest costs). The proportionate share to be paid by Tenant of CAM shall be computed on the ratio that the total floor area (all of which is deemed “leaseable”) of the Demised Premises bears to the total leaseable floor area of all constructed buildings within the Shopping Center (excluding, however, areas owned or maintained by a party or parties other than Landlord); provided that in no event shall Tenant’s monthly payment of CAM be less than the amount specified in Section 1.1(o) above. If this Lease should commence on a date other than the first day of a calendar year or terminate on a date other than the last day of a calendar year, Tenant’s reimbursement obligations under this Section 7.4 shall be prorated based upon Landlord’s expenses for the entire calendar year. Each month during the term of this Lease, at the same time and in the same manner as with the monthly installments of Minimum Guaranteed Rental, Tenant shall pay to Landlord one twelfth (1/12) of the estimated CAM for the current year which Landlord may have given Tenant for the current year or, if the CAM has not been estimated by Landlord, then Tenant shall pay one twelfth (1/12) of the actual CAM for the immediately preceding calendar year. Each CAM payment shall be due and payable at the same time and in the same manner as the payment of Minimum Guaranteed Rental. The amount of Tenant’s proportionate share of the initial CAM shall be as set forth in Article I above. Landlord may at its option make monthly or other periodic changes based upon the estimated annual CAM, payable in advance, but subject to adjustment after the end of the year on the basis of the actual cost for such year, as set forth in Article VI above as to payments of taxes, real estate charges, and insurance. If you have any questions about common area maintenance charges when leasing retail commercial real estate give us a call and we will help get you up to speed. The post What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases? appeared first on Austin Tenant Advisors. via Blogger What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases? The following post is copyrighted by Austin Tenant Advisors - . When renting commercial retail space IN ADDITION to paying pre-negotiated base rents Tenants are also responsible for paying their pro-rata share of triple net charges (NNN). Triple nets are the taxes, insurance, and common area maintenance charges that Landlord’s pass 100% of the costs to Tenants. The common area maintenance (CAM) charge is one of the net fees charged to Tenants in a commercial retail triple net (NNN) lease mainly consists of the maintenance fees for work done on the retail property’s common area. Each tenant is only responsible for their prorata share which is the percentage of the tenants rented space vs the total square footage of the property. Common Area Maintenance Charge Definition in Retail Lease ContractsBelow is an example of how you will typically see common area maintenance charges defined in a retail space commercial lease contract. In addition to the rents and other charges prescribed in this Lease, Tenant shall pay Tenant’s proportionate share to Landlord all of the costs of operation and maintenance of the Common Area (“CAM”) which may be incurred by Landlord in its discretion. CAM shall include, without limitation, all sums expended in connection with: service and maintenance contracts, including, without limitation, windows and general cleaning, removing of snow, ice, debris and surface water, security police (if and to the extent Landlord provides security), electronic intrusion and fire control and telephone alert systems; machinery and equipment used in the operation of the Shopping Center; storm, sanitary and other drainage or detention systems, sprinklers and other fire protection systems, irrigation systems, and electrical, gas, water, telephone and other utility systems; off-site improvements (including off-site detention areas, drainage and detention ponds, landscaping and traffic signals), and the costs incurred by Landlord for maintenance and operation of and/or contributions to such costs maintained by others for any offsite improvements serving the Shopping Center; traffic regulation, directional signs and traffic consultants; permits, program services, and loudspeaker systems; paving, curbs, sidewalks, walkways, roadways, roofs, parking surfaces (including repaving, sealing, striping and patching); lighting facilities; signage; all costs and expenses allocable to any Declaration of Easements, Covenants, Conditions and Restrictions filed against the Shopping Center as amended from time to time (the “ECR”); margin taxes; the cost of compliance with any accessibility statute including, without limitation, the Americans With Disabilities Act and the (State) Accessibility Standards); all costs and expenses of water or other common utilities; uniforms, supplies and materials used in connection with the operation and maintenance of the Shopping Center; advertising, seasonal decorations, whatever management fee Landlord pays to the manager of the Shopping Center, CAM fees, an administrative fee equal to fifteen percent (15%) of CAM, and a reasonable allowance for Landlord’s overhead costs and the cost of any insurance for which Landlord is not reimbursed pursuant to Section 6.2, but specifically excluding all expenses paid or reimbursed pursuant to Article VI. In addition, although the roof(s) of the building(s) in the Shopping Center are not literally part of the Common Area, Landlord and Tenant agree that roof maintenance, repair and replacement shall be included as a common area maintenance item to the extent not specifically allocated to Tenant under this Lease nor to another tenant pursuant to its lease. With regard to capital expenditures (i) the original investment in capital improvements, i.e., upon the initial construction of the Shopping Center, shall not be included and (ii) improvements and replacements, to the extent capitalized on Landlord’s records, shall be included only to the extent of a commercially reasonable depreciation or amortization (including interest accruals commensurate with Landlord’s interest costs). The proportionate share to be paid by Tenant of CAM shall be computed on the ratio that the total floor area (all of which is deemed “leaseable”) of the Demised Premises bears to the total leaseable floor area of all constructed buildings within the Shopping Center (excluding, however, areas owned or maintained by a party or parties other than Landlord); provided that in no event shall Tenant’s monthly payment of CAM be less than the amount specified in Section 1.1(o) above. If this Lease should commence on a date other than the first day of a calendar year or terminate on a date other than the last day of a calendar year, Tenant’s reimbursement obligations under this Section 7.4 shall be prorated based upon Landlord’s expenses for the entire calendar year. Each month during the term of this Lease, at the same time and in the same manner as with the monthly installments of Minimum Guaranteed Rental, Tenant shall pay to Landlord one twelfth (1/12) of the estimated CAM for the current year which Landlord may have given Tenant for the current year or, if the CAM has not been estimated by Landlord, then Tenant shall pay one twelfth (1/12) of the actual CAM for the immediately preceding calendar year. Each CAM payment shall be due and payable at the same time and in the same manner as the payment of Minimum Guaranteed Rental. The amount of Tenant’s proportionate share of the initial CAM shall be as set forth in Article I above. Landlord may at its option make monthly or other periodic changes based upon the estimated annual CAM, payable in advance, but subject to adjustment after the end of the year on the basis of the actual cost for such year, as set forth in Article VI above as to payments of taxes, real estate charges, and insurance. If you have any questions about common area maintenance charges when leasing retail commercial real estate give us a call and we will help get you up to speed. The post What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases? appeared first on Austin Tenant Advisors. via Tumblr What are Common Area Maintenance Charges (CAM) in Commercial Retail Leases?
from Twitter https://twitter.com/AustinTenantAdv via Blogger Shelby Tonja thanks for following me on Twitter! https://t.co/cFzl8ftAWc The following post is copyrighted by Austin Tenant Advisors - . When leasing commercial real estate having a more flexible lease will allow you to ensure the the building you lease space from will accommodate your current and future needs. Flexibility is key especially if you have a company with unpredictable growth. Below are a few ways to make a commercial lease more flexible for your business.
The above are a few ways make a commercial real estate lease more flexible for your company. Just remember you will have to know how to negotiate these items. Having a commercial real estate tenant representative help you can increase your chances of success and their service does not cost you anything. The post Ways to Make a Commercial Lease More Flexible for Your Business appeared first on Austin Tenant Advisors. via Blogger Ways to Make a Commercial Lease More Flexible for Your Business The following post is copyrighted by Austin Tenant Advisors - . When leasing commercial real estate having a more flexible lease will allow you to ensure the the building you lease space from will accommodate your current and future needs. Flexibility is key especially if you have a company with unpredictable growth. Below are a few ways to make a commercial lease more flexible for your business.
The above are a few ways make a commercial real estate lease more flexible for your company. Just remember you will have to know how to negotiate these items. Having a commercial real estate tenant representative help you can increase your chances of success and their service does not cost you anything. The post Ways to Make a Commercial Lease More Flexible for Your Business appeared first on Austin Tenant Advisors. via Tumblr Ways to Make a Commercial Lease More Flexible for Your Business The following post is copyrighted by Austin Tenant Advisors - . When leasing commercial real estate you will find that most landlords prefer longer commercial leases. If you are an existing, financially sound company that has been in business for over 5 years signing a longer commercial lease is not a big deal. However if you are a new business or startup company predicting the success of your company beyond 2-3 years can be quite challenging. Below are a few reasons why landlords prefer longer commercial leases.
Now that you know why landlords prefer tenants to sign longer commercial real estate leases you have to decided what is best for your business. Don’t force yourself to sign a longer lease than necessary especially if it does not make business sense. I know you may really like one particular building that requires a 5 year lease, however if you are unsure about the future of your business then you will be setting yourself up for failure by signing a long lease. If the landlord will not budge on the required lease term then find a building that will be more flexible. The post Why Do Landlords Prefer Longer Commercial Leases? appeared first on Austin Tenant Advisors. via Tumblr Why Do Landlords Prefer Longer Commercial Leases? |
AuthorThe experienced commercial realtors at Austin Tenant Advisors specialize in representing the best interests of buyers and tenants in the Search, Selection, Negotiation, and Occupancy of Office, Retail, Industrial & Warehouse Space for lease, rent, or sale in and around Travis, Williamson, Hays, Bastrop, & Burnet Counties, which are the 5 largest counties in Central Texas. We serve the surrounding cities such as Pflugerville, Round Rock, Georgetown, Leander, Cedar Park, Lakeway, Bee Cave, Sunset Valley, Dripping Springs, Buda, Kyle, San Marcos, Burnet, Marble Falls, and more. Archives
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