COVID-19 - SOMETHING POSITIVE?????

Believe it or not, there have been some positive effects of COVID 19 as a result of our mandatory slow down.  We have gotten back some much needed family time.  It’s amazing what can happen when families are together more and some of their primary entertainment sources are taken out of the equation. Many families are cooking together, playing board games, having discussions, spending more quality time together, and bonding in ways they haven’t in a long time.  Nature has returned to balance with fewer cars on the road and less emissions, many large cities around the world saw clear blue skies. Wildlife populations also returned to areas in which they hadn’t been seen in decades. We’ve realized how valuable human connection is as sometimes we get so wrapped up in our technology that we forget how great it is to have face-to-face contact with other people.  Masks have increased the value of smiles and hugs, two of the things that we miss the most. 

None of these things can replace the lives lost due to COVID-19, but for many of us, this experience has brought us some necessary connection with one another and reminded us just how special our world and our loved ones are.

We are here to help you and your clients with all aspects of commercial property management.  Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

 

COVID STORY OF HOPE

Rosa has been a maid at a New York high rise complex for over 20 years.  When COVID hit, Rosa was furloughed and soon found herself sleeping on the couch of a relative.  Soon after, Rosa was called by the property manager to meet at one of the vacant units of the high rise where Rosa formerly worked for 20 years.  Rosa assumed, and was hopeful, they might need her to clean the unit.  Much to Rosa’s surprise, the property manager handed her the keys to the unit and informed Rosa that a large group of the buildings residents pooled their money to pay for the rental of the unit for 2 years for Rosa to live in.  The residents let Rosa know that she is a ray of sunshine and enjoy her presence.  Based on a true story.

Every cloud has a silver lining.  There is something good to be found in every bad situation.  What’s your silver lining in this COVID world?  I would love to hear your story.

COMMERCIAL PROPERTY MANAGERS

Adaptability is at the heart of what it means to be a property manager.  This year, in the face of a pandemic and recession, property managers have rapidly shifted gears to solve problems they’ve never faced before. They’ve adapted to regulatory changes like eviction moratoria in residential, implemented new safety protocols in their properties, and started operating remotely…all in response to conditions that changed overnight.  In this unexpected environment, property managers have become more valuable than ever.  Managing a property has become more complex than ever and the value of property managers’ expertise in property operations, local market conditions, and regulatory changes has increased tremendously.  Commercial property managers have spent the year working closely with tenants to modify lease agreements and create payment plans.  COVID-19 has made property managers’ value more evident and in-demand than ever. The crisis management that has long been a primary aspect of property managers’ work has prepared them to adapt in the face of the novel challenges that have emerged in 2020.

We are here to help you and your clients with all aspects of the commercial rental and property management market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

COVID-19 AND COMMERCIAL PROPERTY MANAGEMENT

In the world of COVID-19, a lot has changed for landlords and property managers. While economists attempt to predict the impact of COVID-19 on commercial real estate, property managers are on the front lines, actively helping owners and tenants cope with the pandemic. For property managers, a highly transmissible virus poses a challenge in a job that thrives on human interaction and connectedness. Frequent communication is more critical than ever, staying in touch with landlords, tenants and vendors keeping everyone on the same page. This will create some peace of mind and make whatever problems come up seem more solvable. Containment measures for the virus have forced us to limit physical interaction but that doesn’t mean communications will be less effective. Automated property management software plays a key role as it allows you to streamline your communications including online payment options and statements.

We are here to help you and your clients with all aspects of the commercial property management and leasing market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.


COVID-19” & HVAC SYSTEMS

“Can a building’s heating, ventilation and air conditioning (HVAC) air filters protect me from getting COVID-19”

Filtration in a building HVAC system can be a part of an overall risk mitigation approach but is not generally regarded as a solution by itself.  There is no direct scientific evidence of benefit, but some reduced exposure can reasonably be inferred based on the ability of some filters to remove particles that contain a SARS-CoV-2 virus.  In order for filters to have any impact on infectious disease transmission, transmission has to occur through the airborne route, filters have to be properly installed and maintained in appropriate systems to treat recirculated air, and filters have to be appropriately designed for the building in which they are used.  More importantly, in most buildings and in most situations, filters may be considerably less effective than other infection control measures including social distancing, isolation of known cases, and hand-washing.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

Force Majeure

How do force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract) provisions in a commercial lease impact the contractual obligations of commercial tenants and landlords?  Force majeure provision is common in most commercial leases and excuse non-performance of certain obligations under a lease if an unavoidable or unforeseen act prevents the tenant, or the landlord, from performing.  Examples of events covered by force majeure provisions include natural disasters, labor strikes, governmental actions, wars, and a catchall of unforeseeable circumstances beyond the control of the party that is impacted.  If your lease contains a force majeure clause, it is important to carefully review its language to determine which events are covered.  Pay particular attention whether "epidemics" or "pandemics" are considered force majeure events.

If COVID-19 is considered a force majeure event under your lease, some contractual obligations under the lease may be excused: for instance, if a tenant is forced to close its business due to a governmental decree, such tenant will not be in default under a provision that requires the continuous operation of the tenant's business in the premises. However, most force majeure provisions do not excuse or postpone monetary obligations and, in fact, many affirmatively state that monetary obligations are not excused (i.e. a tenant's obligation to pay rent, a landlord's obligation to provide a tenant improvement allowance, etc.).

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

COMMERCIAL TENANT RIGHTS

In general, the rights of commercial tenants are inscribed in the lease.  Courts tend to decide cases based on adherence to lease terms even if the terms seem to violate aspects of basic fairness.  Residential tenants have far more protections than commercial tenants do under the law.  To facilitate a positive landlord-tenant relationship, spell out lease terms clearly.  For example, regarding entry to the property by the landlord, define what constitutes “adequate notice” clearly in your lease.  This is especially important for tenants whose businesses require some level of confidentiality.  Make sure that you ensure more than adequate notice in cases of invasive maintenance that may affect your tenant’s business operation.

We are here to help you and your clients with all aspects of commercial property management.  Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

COMMERCIAL PROPERTY MANAGEMENT

One of the greatest ways to increase the value of commercial real estate is through good property management.  While buying a property at the right price is critical, what you do with it after the purchase is often more important.  It is very important to keep your tenants happy.  Unlike residential properties, it is very difficult and expensive to find new tenants for commercial properties.  It can take several months to find a tenant.  A leasing commission isn’t due until you sign the lease, however, often you have to spend money on the space to make it leasable.  Therefore, the best way to maintain your income is to keep existing tenants from leaving.

Maintaining a positive tenant relationship involves regular communication, anticipating their needs, and being proactive.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

COMMERCIAL LEASES

There are three basic types of commercial real estate leases. These leases are organized around two rent calculation methods: "net" and "gross." The gross lease typically means a tenant pays one lump sum for rent, from which the landlord pays his expenses. The net lease (“NNN”) has a smaller base rent, with other expenses paid for by the tenant. The modified gross lease is combination of the two. While terms vary widely, building by building, when evaluating options for commercial space lease, it is important to compare the different lease options paying attention to all expenses, and not just the base rental rates. Net lease base rental rates tend to be much lower, with additional expenses added for the real monthly rate.

The most important rule of commercial leases is for tenants to read their leases carefully, and clarify exactly what expenses they have responsibility for. Circumstances under which additional charges will occur should be identified and caps on expenses negotiated.

We are here to help you and your clients with all aspects of the commercial market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

When it comes to residential and commercial property management, are they really that different? In short…yes.

One of the largest differences between residential and commercial property management is the skill sets required to be successful. While some basic duties will overlap for both real estate types, commercial property managers are required to have a much broader, diverse and specific set of knowledge in order to successfully run their property types. Commercial covers an array of different property types (medical, office, retail, restaurant, industrial, etc.), which house drastically different businesses. Another big difference between residential and commercial property management is the people that occupy the property. While every tenant has needs to service, those needs do not translate into dollars and cents for residential tenants as it does for commercial. Tenants in a commercial property are running a business in that space, and how that space functions directly affects the success of their business. Think about it in terms of broken air conditioning. A residential tenant will be unhappy and uncomfortable, yes, but it isn’t an issue that loses them money. In a commercial property, having an issue with air conditioning means a tenant’s clients will be uncomfortable and unhappy, possibly causing them to lose business.

*Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

What does triple net or “NNN” reference mean in a commercial lease?

In a commercial lease the rents are often quoted as being triple net, or NNN. What this means is that in addition to the quoted rental rate, the tenant, under the lease, is responsible for their share of the operating expenses and real estate taxes associated with the property. Triple nets refer to 3 categories; Maintenance, Insurance and Taxes, thus the NNN (net-net-net) reference. Maintenance generally covers the maintenance of the property, including landscaping, common area utilities and property management. Because different landlord's might include or exclude certain expenses from their definition of NNN’s, it is important to ask the question to be better able to accurately predict operating expenses.

We are here to help you and your clients with all aspects of commercial property management. Please contact us for further assistance.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

What is the difference between subleasing and assigning a commercial lease?

An assignment occurs when a tenant transfers its entire interest in a leased property for the remainder of the term of the lease to another party. A sublet occurs when the tenant transfers anything less than its entire interest. When an assignment occurs, tenants are normally released from all responsibility for the lease. However, it is important to note whether the terms of an assignment actually give a full release from all responsibility. Sometimes the language will keep the original tenant on the hook if the new tenant fails to pay rent or fails to fulfill its obligations. On the other hand, with a sublease the tenant remains ultimately responsible if the subtenant fails to uphold its responsibilities.

We are here to help you and your clients with all aspects of commercial property management and leasing. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

LOCATION - LOCATION - LOCATION

Why does location matter so much to businesses? If you’ve decided to open a retail business in a new area, it’s important to find a real estate broker who is knowledgeable about the best areas to set up shop and draw new customers. Every city or town has its hotspots — areas where pedestrians frequently pass by, or walk through, on their way to work or school. These are the areas to target in order to have a successful retail business in a new area. Without the proper consultation and knowledge on your side, it’s easy to fall into the trap of cheap property in the wrong part of town. That is not to say that there aren’t some great opportunities in properties that cost less to rent, but there is a certain premium to be paid on customer-facing properties that actually draw customers. A local real estate broker is someone who has lived in the city you are considering, so they know exactly what works and what doesn’t. Find someone who can tell you about a property’s history: which businesses have operated from that location, which of them have succeeded and which have failed, and why the property is currently on the market. If it’s a long list of commercial and retail failure stories, you’ll know to look elsewhere for your business.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

What is this thing called "Quiet Enjoyment"?  

In a commercial lease, quiet enjoyment is the most fundamental and often misunderstood right obtained by a tenant.  The covenant of quiet enjoyment means more than just a noise-free environment.  It is an obligation that provides that the landlord will not interfere with a tenant's right of possession or tenant's enjoyment of the leased premises.  In most leases, the covenant is written in the lease document, setting out the parameters for quiet enjoyment. 

We are here to assist you and your clients.  Please give us a call should you have any questions.

 There are no warranties, express or implied, including fitness for a particular purpose, made with respect to this communication. Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should obtain the advice of an attorney well versed in these matters.

 

 

COMMERCIAL RENT CONTROL?

Is there rent control on commercial property?

Whether you're the tenant of a commercial rental space, or the landlord managing the property, rent increases can be a tricky business.  Meanwhile, no such laws prohibit a sudden rent increase for commercial properties. Instead, commercial leases are strictly governed by the original lease agreement.

 We are here to help with the management of your commercial building.

NOTHING FOUND HEREIN SHOULD BE CONSTRUED AS AN ATTEMPT TO OFFER OR RENDER A LEGAL OPINION OR OTHERWISE ENGAGE IN THE PRACTICE OF LAW. YOU SHOULD NOT RELY SOLELY ON THIS INFORMATION. WE ENCOURAGE OUR CLIENTS TO WORK WITH A LAWYER EXPERIENCED IN COMMERCIAL AND/OR RESIDENTIAL REAL ESTATE MATTERS AS THEY CAN BE COMPLICATED AND CONFUSING.

How do commercial leases differ from residential leases?

It's crucial to understand from the get-go that, practically and legally speaking, commercial leases and residential leases are quite different. Here are the main distinctions between them:

*Fewer consumer protection laws.  Commercial leases are not subject to most consumer protection laws that govern residential leases -- for example, there are no caps on security deposits or rules protecting a tenant's privacy.

*No standard forms.  Many commercial leases are not based on a standard form or agreement; each commercial lease is customized to the landlord's needs.  As a result, you need to carefully examine every commercial lease agreement offered to you.

*Long-term and binding.  You cannot easily break or change a commercial lease.  It is a legally binding contract, and a good deal of money is usually at stake.

*Negotiability and flexibility.  Commercial leases are generally subject to much more negotiation between the business owners and the landlord, since businesses often need special features in their spaces, and landlords are often eager for tenants and willing to extend special offers.

Before you sign a lease agreement, you should carefully investigate its terms to make sure the lease meets your business's needs.

 There are no warranties, express or implied, including fitness for a particular purpose, made with respect to this communication. Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should obtain the advice of an attorney well versed in these matters.

 

COMMERCIAL BUSINESS PLAN

What is a real estate marketing plan and why do you need one?  Whether you have an established marketing team or working with limited resources, developing an effective commercial real estate marketing plan can be overwhelming, especially in the highly competitive digital age. When faced with an abundance of different marketing tools and solutions, it can be all too easy to fall into the trap of spreading your game plan thin and lose focus on core objectives.

Creating a real estate marketing plan will serve as a blueprint for your property marketing efforts for a specified timeline. It will help you document and organize all key activities, efficiently manage multiple tasks, track overall progress of your project, and communicate the plan with various landlords with greater clarity.

There are no warranties, express or implied, including fitness for a particular purpose, made with respect to this communication. Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should obtain the advice of an attorney well versed in these matters.

COMMERCIAL TENANTS WITH "ISSUES"

How should a landlord and property manager deal with a problem commercial tenant?  One of the first steps is to complete a thorough, well-drafted lease that will anticipate and address most problems. The lease should spell out in detail what circumstances will constitute an event of default under the lease and should state the remedies that are available after an event of default, including immediate eviction and the recovery of damages, attorneys’ fees and other costs of enforcing the lease. 

Beyond that, the best thing a landlord can do is find and sign solvent, reliable tenants.  Landlords should conduct proper due diligence and get detailed financial statements from prospective tenants. To help ensure payment from corporate tenants, landlords also should require written personal guarantees from the individuals and their spouses who own the corporation or other entity that is the named tenant.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.

Building Maintenance

 

When it comes to the maintenance of commercial property, responsibilities are divided between landlord and tenant according to the lease.  It is important that you understand your responsibilities for the repair and maintenance of the building and the premises you are leasing.  Tenants are typically responsible for internal repairs and landlord responsible for external repairs and maintenance.  In some cases, you will also be responsible for external maintenance as well. This is more likely if you are the sole occupant of a building.

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.