Blog Series, part 1

Both landlords and tenants seek help to resolve a dispute that has arisen with their commercial lease because they signed a misunderstood or poorly negotiated agreement. This is especially true of less sophisticated tenants who, for whatever reason, have chosen to sign the landlord’s “standard form lease” with few, if any, changes. Additionally, inexperienced landlords often use a form lease without fully understanding the terms and conditions imposed upon them.

The potential for dispute in a commercial lease can result from many things; however, the focus of lease negotiations is often limited to rent, concessions and other economic considerations. As a result, many important issues are often overlooked; misunderstood or under-negotiated (even by sophisticated landlords and tenants) that could materially affect the long-term success of the deal and are often the reason for their calls for help.

Commercial leases are often called “living” documents, as they govern the ongoing relationship of the landlord who owns or manages a property and the tenant who operates its business on that property. A lease is like a partnership agreement because it provides the parameters of a business relationship, and unlike many legal documents, the real work of a commercial lease commences when the document is signed and the deal is done. Negotiating the best possible deal is done throughout the entire leasing process, from the initial decision to move forward through lease execution. There are many significant terms and conditions that should always be considered when negotiating the deal.  This article sets forth a few of the major lease provisions that landlords and tenants should focus on, but is not intended to serve as a substitute for consulting with a real estate attorney.

Will Smith video on Success

I really liked this video and wanted to share it with others.  I hope you enjoy this as much as I did!

Negotiating the lease deal

It is amazing how often companies find themselves looking for guidance because an unpleasant surprise has come up during the term of their lease, with the vast majority of such issues costing them significant dollars (that wasn’t included in their budgets) in attorneys’ fees and costs to remedy the situation.  Often such surprises are due to having signed a poorly understood or poorly constructed lease agreement and could have easily been avoided.  This is especially true of smaller, less sophisticated tenants who, for whatever reason, sign the landlord’s “Standard Form Lease” with few, if any, changes. 

A lease is much like a partnership agreement in that it governs a business relationship that could last for many years.  When everything goes as planned, most leases will serve the parties well but the true test occurs when there are hiccups in the relationship.  If the lease has not been carefully drafted, a hiccup can become a major problem.  Tenants often lose sight of the fact that the “Standard Form Lease” represents the landlord’s wish list, and if not appropriately modified, will likely not serve their interests when issues arise. 

Most tenant rep firms do not fully protect their clients throughout the entire leasing process, as achieving a favorable deal includes the careful negotiation of the definitive lease agreement.  This is where our Studley team differs from the rest.  We’d be happy to show you why we’re Studley!

U.S. Commercial Real Estate Investors Turn Bullish on Office Sector for Acquisitions,

U.S. Commercial Real Estate Investors Turn Bullish on Office Sector for Acquisitions, According to Latest PwC Real Estate Investor Survey™

NEW YORK, Dec. 20, 2011 /PRNewswire/ — As 2011 comes to a close, commercial real estate investors continue to seek buying opportunities with the office market gaining increasing interest, despite a mixed bag of improving commercial real estate fundamentals, according to the fourth quarter 2011 findings of the PwC Real Estate Investor Survey, released today.

According to the report, buying opportunities beyond the core markets remain tricky due to a protracted recovery outlook for both the U.S. and many secondary markets.  Surveyed investors cite that commercial real estate continues to offer attractive yields compared to alternative investment vehicles.  In the office sector, investors are bullish regarding their prospects for tenant retention and expect office rent growth in many markets in the coming year.