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Jim,
I am looking for some sound advice pertaining to leasing 30,000ft of commercial space in Lincoln, NE. I am a small business owner, and myself and two partners are looking to open a new business in 1/3rd of a vacated kmart building. I own the building my current business is in, so leasing something this large will be a new area for me, and I want to gain as much knowledge to lease agreements as I can. Can you summarize the top 5 things that I need to be aware of and negotiate for when we get down to hammering out the agreement? Specifically..since the building is in need of some serious repairs...what is a reasonable expectation for the landlord to be willing to do to for these repairs? Any advice would be greatly appreciated, thank you for your time!
Brandon-
There are entire set of books published ("Friedman on Leases")that discuss all the things to be aware of when you consider signing - and taking financial responsibility for - a large commercial lease.
Rule No.#1 is not to trust anything that a landlord tells you without verification. Nothing. There are literally hundreds of common "hidden" risks that are frequently included in a landlord's lease. You will want to know that none of them are contained in the lease you will sign.
Do not be penny wise and pound foolish. Hire either an attorney that specializes in commercial lease documents; no young law partners or divorce attorneys, or a very mature, experienced COMMERCIAL real estate broker. You are putting too much at risk otherwise.
Trust me on this.
Finally, I have represented the K-Mart corporation in the past, and 30,000 sq. ft. would be 27% of their standard footprint size: 110,000 sq. ft.
Good luck with your new business venture.
-Jim
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Answers by Expert:
Jim Avancena, CPM
Expertise
Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.
Experience
Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.
Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.
Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".
Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.
Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.
Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.
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