Interestingly, after the stay-at-home orders, tenants and their advisors focused their lease reviews almost exclusively on the tenant’s lease obligations and whether they were excused, but spent little time reviewing the landlord’s obligations and whether they were excused.
The same happens in commercial real estate. When one tenants moves out, another will be moving in. If the current tenant cannot vacate in time, that exposes the successor tenant who won’t be able to move in on time. One holdover begets another holdover. Luckily for the real estate world, these broken chains are usually few and far between and the impact can be mitigated through overtime workers, temporary space or even paying some punitive holdover rent. Now, however, we’re in completely unchartered waters.
Exis is excited to announce the addition of three new partners to add to our growing world presence: Benchmark Commercial (Denver), Landmark Advisory Services (Montréal and Calgary), and The Tenant Agency (Washington, D.C. – who replaced former partner The Ezra Company).
In October and November, over 60 Exis partner firm representatives gathered for Exis’s annual regional events: the North American Summit, held in Costa Mesa, CA in conjunction with the CoreNet Global North American Summit, and the European Summit, held in Amsterdam, Netherlands.
In order to compare a deal to the market, one must have access to quality data. Maintaining a database of relevant transaction comps is critical. Comps need to include details on all variables which drive landlord returns; this includes average net rental rates over the term of the lease, as well as landlord concessions such as tenant improvement allowances, free rent, and commissions.
Every tenant is in a different situation, so there are no hard and fast rules. However, your representation team (both your broker and your real estate lawyer) needs to be strategic in language negotiated to clearly define the landlord right, various mechanics of exercising the right, and the limitations of the right to protect your business.
Landlords need relocation rights to maximize revenues for the building or project. This scenario occurs frequently in a newly completed building or one that is under construction and pre-leasing space. Having the ability to move a smaller tenant to another area on the same floor or to another floor in order to accommodate a larger tenant is ideal for landlords in securing tenants that may need a full floor or prefer a certain area of the building.
“If the tenant doesn’t use a broker, those fees or most of those fees don’t disappear and are still getting paid to internal and 3rd party entities and the tenant’s true savings is none or nominal compared to what they could have saved using a tenant broker.”
Cresnia is a boutique tenant rep firm that focuses on city-center, high-profile tenants in the Stockholm, Sweden area.