Commercial Agents – How to Negotiate Leases in Commercial Property Today

When it comes to commercial property leasing and performance, the lease that you negotiate is really a key part of the process. Lease negotiation today can be protracted and lengthy. The landlord and or the property manager need to be aware of lease negotiation practices that apply to their property type and local area, and have a system to implement when they are leasing vacant premises.

At the outset, it should be said that a good property solicitor is highly valuable to the lease negotiation process. The commercial real estate agent is really only there to negotiate the lease and is not a lease preparation specialist. The agent brings the parties together through a comprehensive marketing campaign targeted to the right type of tenants. That is why they are paid the commission. The solicitor should then take over the lease documentation process to ensure that a correct and comprehensive lease document is created for the particular occupancy situation.

There are many types of landlords out there owning diverse and different properties. Regrettably the smaller property investors commonly tend to cut corners in legal costs or seek low cost lease documentation. The end result is a lease document that generically relates to the property.

It is best to get a solicitor involved in each and every lease document after the agent has negotiated the basic elements of the lease. A heads of agreement is appropriate for this process and that agreement can then be given to the solicitor to structure final documentation in legal form.

Here are some other main elements to consider in negotiating leases in commercial or retail property:

  1. Form a decision as to how long the premises should be leased in the initial term. This term should comply with the changes to the property that the landlord requires including any refurbishment strategies or relocation situations.
  2. Many landlords do not like options for a further term being given to tenants. Whilst you have to comply with property legislation relating to leasing, the issue of options really does need to be considered before the tenant asks for such. Options should only occur if the landlord can comfortably allow the tenant to remain in occupancy in the location. Due regard should also be given to the other adjacent tenants in occupancy and their needs for expansion.
  3. The type and amount of rental to be asked for should be clearly set before the marketing of any vacant tenancy occurs. Whilst it is permissible for a landlord to negotiate rental downwards, it is important that the asking rental is comparable to market rental; otherwise you won’t get any enquiry from the marketing of a vacancy.
  4. Understand the outgoings for the premises and how you are going to recover those costs for the landlord. The decision here will have impact on the net and gross rents that you may select.
  5. Prepare the premises for inspection and presentation. Whilst many landlords prefer to not spend any money until tenants are found, this process can be counterproductive and dissuade tenants from entering into negotiation for the vacancy. Essentially a vacant tenancy needs to look its best before tenants are taken through for the inspection. To achieve this you may need to paint the premises, reinstate the ceiling tiles, and replace the floor coverings.

The negotiation of a commercial or retail property lease is a planned process. By taking these and other steps early you can reduce the number of problems that you have in the lease negotiation process.

Commercial Agents – How to Deal With Difficult Landlord Clients

When you work in a commercial or retail real estate agency, it is easy to get frustrated with demanding landlords and difficult property situations. When the property market is under pressure, landlords are seeking greater assistance from the agents that they use (that’s us). Frustration and pressure will arise in many an agency and landlord relationship as the property market goes through change.

Comprehensive Service

In a tough property market, the commercial real estate agents that comprehensively service all property needs are those that are in demand. A well leased and managed property will eventually be sold. Every stage of the client relationship today requires special skills in the agency across leasing, sales, and property management.

Understanding the factors of change in the property market today and how to adjust for them is critical to helping clients with property pressures. The reality of the current property market is that control, strategy, results, and information are really the main factors that the landlord is looking for in moving ahead. The fact is they need our help. We are the best providers of strategic solutions when it comes to property occupancy, returns on investment, and disposal strategies.

Here are some further strategies to use with landlords in this tougher property market.

  1. Keep them up to date with property and lease issues with all tenants in the tenancy mix and the adjacent properties. Work well in advance when it comes to lease documentation and critical dates. Every lease in the subject property should be reviewed for future events and pressures on cash flow.
  2. Market information will change from time to time. Competing properties will also put some pressure on surrounding property sales and property leases. Keeping clients and landlords briefed on the pressures of the competition properties is quite important.
  3. Lease negotiations will occur with sitting tenants and new tenants from time to time. Importantly the negotiation should occur with due regard to the prevailing market conditions. That will include terms of rental, terms of lease, and incentives. The landlord can be positioned for a competitive lease transaction when all elements of the property market are clearly assessed and provided.
  4. The quality of tenants within the tenancy mix, and the threats of vacancy are two highly important issues to be managed and optimized. Both will have impact on the property income profile and tenancy mix. What threats emanate from the property tenant mix now?
  5. Stay in touch with all tenants within the tenancy mix on a regular basis. They are likely to need lease adjustments or changes of occupancy from time to time. If they are good tenants and considered worthwhile for the future of the property, then negotiations should be open and encouraged. It is better to have a stable occupancy than the volatility of increasing vacancies.
  6. Good lease management processes can be incorporated into a business plan for the property. Each year the property can be reviewed in a number of ways with the results being incorporated into the business plan. The plan would include lease reviews, tenancy mix, income profiles, expenditure budgets, and renovation strategies.

Difficult landlords are really just looking for further help and specialized assistance. It is quite likely that they and their property are under some pressures. Improve your services as a specialized commercial agent so that you can help these landlords achieve better levels of property performance in difficult times.

How Technology Stole the Show at Fashion Week

As fashion week participants create shows that are increasingly geared towards consumers, all sorts of technology is being used to make sure the designers and their creations reach as broad an audience as possible. While in the past the fashion shows were more of an insider affair, now many design houses are trying to reach out to a broader demographic and, of course, trying to boost sales. More and more, clothes are being offered for sale there and then, with some fashion houses offering a full brand range in a see-now, buy-now capacity – everything from the make-up to the accessories to the shoes. Technology now plays a huge role in all our lives and nowhere is this more evident than at the fashion weeks, where technology really stole the show, in some ways at least.

See-Now, Buy-Now

While most of the see-now, buy-now options were offered through each house’s existing e-commerce site and their physical stores, while Temperly London paired up with social app Vero to allow consumers to buy three of their fashion week looks right now.

Snapchat and Instagram Stories

While which of these will win their ‘format war’ remains to be seen, both were used fairly extensively at Fashion weeks. Misha Nonoo used Snapchat to slowly unveil her collection, while J Mendel documented his entire collection with Instagram Stories. Industry experts seem to think that Instagram Stories is the perfect medium for sharing fashion week with the fans.

Chatbots Taking Over

Shopability was a big thing this season and both Burberry and Tommy Hilfiger introduced AI run chatbots as a new user interface. With chatbots taking over our fashion shopping experiences, we better hope that they do not develop artificial intelligence that becomes smarter than we are!

Virtual, Mixed and Augmented Reality

Even the excitement of the shows themselves was not enough, it seems. Many shows had an element of alternative reality to them. For example, in New York fashion week, Intel worked with several designers to broadcast their shows in virtual reality, powered by Voke’s GearVR app, so viewers could feel as though they were right on the front row. Rebecca Minkoff worked with augmented reality, working with shopping app Zeekit to allow customers to upload a picture of themselves and see what they would look like in their favourite outfit from the show. Meanwhile, real innovation came in the form of mixed reality space, where an audience could wear Microsoft Hololens headsets to see an extra layer over reality. Soon, perhaps people all over the world could be watching a fashion show in their own living room and feel as though they are really right there.

One thing is certain, technological change is swift and fashion is not going to want to be left behind.