Commercial Leasing

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What Happens to Leases When a Property is Sold?

Leases are contracts that encumber a property even after a real property is sold. So if you acquire an industrial building that is already leased and the lease allows five options to the tenant for 5 year for each option the tenant has rights to rent the building for at least 25 more years. So if you think you are going to purchase the building and eject the tenant you are in for a big disappointment. Why would an owner give a tenant renewal options that can continue to control the use of a property over a 25-year term? There are a number of motivations. Some tenants have to make significant tenant improvements. A dentist for example may want to make improvements that cost hundreds of thousands of dollars and they can't make them if their lease will expire after 3 to 5 years.

Commercial Lease Terms are Important

If most landlords are chargina a $ 0.25 per square foot per month common area maintenance (CAM) fee and your landlord is charging $ 0.35 per square foot per month for similar space, that relatively "small" CAM charge difference would be $ 12,000 per year for a 10,000 square foot space or $ 6,000 per year for a 5,000 square foot space.  It's not peanuts; you need to know why your landlord thinks that because his expenses are higher, maybe because of building faults or overpaying for expenses, that you should be suffering because of those problems.

Convert your Office to a Retail Use

If you are a commercial real proeprty owner in Las Vegas, Nevada and you follow the vacancy rates by property type you are probably already aware that the weakest commercial real property type or segment is offices, and in early 2014 we are still seeing a vacancy rate near 23 percent for them.  For some there exists an opportunity to take advantage of the stronger retail market with vacancy rates closer to 11 percent.  Making a full or partial transition depends on a number of factors.

Will the Echelon Project Sale Turnaround the Las Vegas Commercial Market?

While there is no doubt in my mind that the approval, sale and development of the Echelon property will go a long way toward bolstering the Las Vegas Strip image, it isn't a pancea, its not going to solve many of the problems still notable in our commercial real property markets.

Are Expenses Increasing for Commercial Properties?

It's common sense if you think about it, rental rates have decreased dramatically over the last several years in Las Vegas, Henderson and Clark County, Nevada in general and expenses have continued to creep up.  So even though they may not have increased substantially commercial building expenses now take up an even larger share of the gross income that is typically derived from a commercial building.

Cell Tower Sites Make Money

As a commercial real estate (CRE) owner you may want to investigate the possiblity of adding a cellular site lease.  While its not a possibile for everyone to add a cellular site, because only a limited number of locations are necessary even with all of the providers and because most sites are sought after in high-density or high-traffic areas, it is worth the time to contact some of the major cellular providers active in your area.

What Commercial Space are You Paying For?

While many commercial rental spaces are straight forward, easy to measure rectangles there are other rental spaces that are more complex due to their size, shape and .  Some buildings offer spectacular entrance stairways, common interior halls and shared public bathrooms.  Other buildings have a common lobby or common waiting room and others offer a common reception area.  "Executive suites" provide well defined spaces and they generally are rented with a number of services included in the lease.

Do You Manage Yourself or Hire a Property Manager?

Most buyers of commercial real estate have decided this question before escrow closes and possibly before they looked at the property that they eventually purchase.  Either they want to be an active "hands-on" manager who collects the rents, deals with the maintenance issues and visits the property often or they are buying it as an investment and they just want to check in on periodically and wait for checks to arrive from the manager.

Is Visibility Important for Office Buildings?

Many office buildings are located in developments or on individual sites that offer little or no visibility and the simple fact is that some tenants don't need to be seen from the street, they just need to be in a professional building in an accessible commercial location.