A letter of credit (LC) offers distinct advantages over a cash security deposit. If the tenant defaults, drawing on the LC should be as easy and automatic as making a withdrawal from the tenant’s security deposit account. Unfortunately, it doesn’t always work out that way. The key is...
Let’s say a dry cleaner wants to lease space in your strip mall. During negotiations, its attorney asks for a use clause permitting use of the premises for not only dry cleaning but also any other uses you find “reasonably acceptable.” It seems fairly unobjectionable,...
Depending on whether your property manager is a third party or works directly for you, it will probably check in differently. Because it’s providing financial information to you, a third-party property manager is obligated to report to you at least monthly regarding financial issues and...
There are two ways to evict a tenant: (1) “Actual eviction,” or going to court to get an eviction order, is the proper way; and (2) “constructive eviction,” or doing something so egregious to interfere with the tenant’s business that it forces the tenant to leave,...
Filling a vacant space while your building is undergoing renovations can be tricky. Your lease needs to protect you from a new tenant who feels entitled to terminate his lease or sue you because portions of the space or common areas aren’t usable during construction. ...
Co-working companies have reportedly caused a disruption in the marketplace in terms of how owners reward brokers for securing licenses and short-term leases. WeWork has reportedly been incentivizing brokers in a more aggressive structure than is typical in the industry.
If you require a tenant to have a guarantor before signing a lease, consider whether you want the guaranty to apply to renewal or extension terms created by future amendments to the lease. If so, make sure your lease and amendments specify that the guaranty will be “...
When a tenant insists on having its space delivered by a "drop-dead date" it has the potential to expose you to a variety of draconian consequences if the date isn’t met. That's why negotiations over this request are extremely important. If you don't carve out rights for...
Private commercial real estate continues to produce steady returns, in line with long-term expectations, according to the recently released UBS US Real Estate Summary. The authors report that CRE investors expect returns to slow in line with historical performance. With rent growth positive and...
It’s critical to take action—by enforcing the lease for a tenant experiencing financial difficulty—as soon as that tenant sends a partial rent payment or misses a rent payment altogether. Regardless of how important the tenant is to your building or center, worry about yourself...
If you defaulted on the mortgage loan for your office building or center because a major tenant didn’t pay its rent, leaving you short of money to make a loan payment, it seems only fair that the delinquent tenant should have to reimburse you for the loan-related damages you had to pay to...
