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When
is an owner “unreasonable”? Often an occupant will find itself with too much or too little
space. If they lease their premises - this can be problematic - especially if
lease term remains. You see, a tenant cannot simply “walk away” from a lease -
it’s a contractual obligation. Therefore, the options are threefold - sublease,
a buy-out, or make do. Generally, a sublease is the route taken. Language in
most leases allows an occupant to find a replacement - sub-tenant - to fulfill
its term. The owner has the right to approve any assignment and cannot
unreasonably withhold permission. But what is “unreasonable”? Credit of the
proxy, use to which the surrogate will operate, portion of the space taken, and
term desired all form the basis of an owner’s approval. If all of the boxes are
checked - creditworthy, clean legal use, and all of the space and term absorbed
- a refusal may be construed as unreasonable.
Small
business owner attitudes.
As 2019 dawned - I sensed a shift in outlooks. After all, the government was
shuttered, the stock market was wildly gyrating and interest rates were rising.
The stench of uncertainty wafted. With almost half the year in the books -
unemployment is at record lows, interest rates have fallen, and attitudes have
improved. Candidly - the housing market performance and tariff hikes still have
me wary. But we will see.
The
unexpected does occur. I
received a call last Thursday from a residential colleague of mine. She and I
concluded a deal in 2009. A friend of hers was panicked. An F-16 had just
crashed through his space. He needed to move - FAST! But what about his
remaining lease term, the damage to his inventory, the gaping hole in the
owner’s roof? That’s why we have insurance - on the owner’s and tenant’s side
of the aisle. Note to owners - make sure your occupants have updated
their policies and their premiums are paid!
Lawyers.
I love the
legal profession! So much so - I nearly went to law school. But, I chose
commercial real estate instead. Too many in my profession find themselves at
odds with counsel. In order to succeed as a commercial real estate professional
- you must learn to peacefully co-exist with attorneys. Just understand - we
get paid to solve a deal’s issues. If an attorney irons out a problem too
quickly - the fees stop and liability begins. Our job is to negotiate economic
points - price, term, deposits, concessions. Inherent risk is involved when
transacting, however. Enter lawyers. Most want the same result - a closed deal.
Just allow them to have their say.
Networking
is not selling. Networking
is about giving - not receiving. Doubt what I say? How many times have you
attended a Chamber meeting, Rotary lunch or Provisors gathering to buy
anything? Bingo! So - if none of the attendees are there to buy - why would you
show up to sell? You’ll be sorely disappointed. You might as well spend that
time knocking on doors or making prospecting dials - if you’re looking to sell.
Discover how you can help another achieve their goals - and networking will
become a gold mine of strategic contacts.
Allen
C. Buchanan, SIOR, is
a principal with Lee & Associates Commercial Real Estate Services in
Orange. He can be reached at abuchanan@lee-associates.com
or 714.564.7104. His website is allencbuchanan.com.
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