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Recognizing Bad Advice From A Landlord
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Recognizing Bad Advice From A Landlord

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  • 1. Landlord Brokers:  The good the bad and the ugly advice.        Joe Oliaro.  [email_address] ,  816-960-0555
  • 2. Assumption Pitfalls: Broker Advice
    •     L andlord brokers, generally, do a great job representing landlords.  That being said, it is in your best interest to know who is on your side of the court and who is going fight to get you a stronger position in the lease.  The consequences can be costly unless you have a trusted advisor to guide you through the process. 
    •      Often times, we as tenant reps meet with businesses who neglected proper representation in their lease or purchase transaction.  In a majority of these instances the businesses ended up paying much more than what they thought they originally agreed upon because of hidden expenses and "spun" wording in the lease documents. 
    •      These problems arise when the tenant is not properly represented or does not fully understand the fiduciary obligation the broker has contracted with the landlord.  In the following slides I will break down some key phrases you should be ready for if you are considering a purchase or a lease for your business.         
  • 3. Key Phrases: Landlord Brokers use to your disadvantage
    • 1. "We can get you the best deal because we know the market."
    • 2. "We can get you a great deal because of our relationship with the landlord."
    • 3. "We can provide great service because we have a lot of branch offices." 
    • 4. "Don't rock the boat and upset the landlord."
    • 5. "Hurry up and get the deal done."
    • 6. "Since you're such a big tenant, you have very few alternatives." 
    • 7. "The landlord's draft is boilerplate, standard terms."
    • 8. "Just focus on rent and workletter - let lawyers take care of the fine print."
  • 4. Key Phrases   
    • 1. "We can get you the best deal because we know the market."
    •  
    •  
    • -  Access is irrelevent from the broker perspective
    •  
    •  
    • - Negotiation needs to address performance stipulations of landlord responsibilities
    •  
    •  
    • - Poor negotiation can turn a "great space" into a "bad deal."
    •     
  • 5. Key Phrases
    • 2. "We can get you a great deal because of our relationship with the landlord."
    •  
    •  
    • - Keep in mind who is representing the landlord in this situation
    •     - The landlord's broker has a fiduciary obligation to
    •  
    •  
    • - You don't need an "in" to get a fair deal on your lease.
    •  
    •  
    • - Find a broker that represents your interests.
  • 6. Key Phrases
    • 3. "We can provide great service because we have a lot of branch offices." 
    •  
    • -  If branch offices are serving the landlord it can create a serious conflict in your benefit
    •  
    • - The key to signing a good lease weighs heavily on the buyer tenant representative to provide thorough site analysis, lease analysis, negotiation, and follow-up, not the location of the offices. 
  • 7. Key Phrases
    • 4. "Don't rock the boat and upset the landlord."
    •  
    •  
    • - Landlords should respect tenants who know their rights and pursue matters in a business-like fashion. 
    •  
    • - There is need for cooperation on both ends but the tenant should not necessarily be fearful of a hostile landlord.  It is rarely the case. 
    •  
    • - Don't forget that the landlord pays the mortgage with your money. 
  • 8. Key Phrases
    • 5. "Hurry up and get the deal done."
    •  
    • - Rushing into a deal will risk overlooking details that can cost you big. 
    •  
    • - Due diligence is paramount and can give you a clear picture of the risk(s) you are facing. 
    •  
    • - Would you repel down a cliff without making sure your rope is secure???
  • 9. Key Phrases
    • 6. "Since you're such a big tenant, you have very few alternatives." 
    •  
    • - While it may be true that space is limited at a certain point in time in the preferred area, it does not mean you have to swallow whatever the landlord offers you. 
    •  
    • - Gain every possible bargaining advantage and have an unbiased representative that  is serving your needs, exclusively. 
    •  
    • - Put your true costs and trade-offs in perspective to identify unecessary premiums and negotiate fair worth.
  • 10. Key Phrases
    • 7. "The landlord's draft is boilerplate, standard terms."
    •  
    • - "Standard terms" generally translates to "pro-landlord terms"
    •  
    • - Look for expense loopholes and markups on markups
    •  
    • - Also beware of loose or vague landlord performance standards and audit rights
    •  
    • - Revise your lease terms to reflect your business needs.
    •  
    • - Negotiate lease according to your business objectives and not the landlords desire to waive liabilities. 
  • 11. Key Phrases
    • 8. "Just focus on rent and workletter - let lawyers take care of the fine print."
    •  
    • - Lawyers are an important part of the lease review but do not stand alone. 
    •  
    • - Lawyers generally look for liability and, generally, are not properly trained to locate excessive lease expenses. 
    •  
    • - Lawyers typically do not perform an on site visit to confirm parts of the lease that need to be seen to be appreciated.
    •  
    • - Lawyers generally do not audit billings, perform a lease marketability comparison or understand how certain ways of charging for electricity and other utilities can affect costs. 
    •  
  • 12. Conclusion
    •      If you are ever purchasing property or considering a major lease transaction make sure you know all of your rights and options. 
    •  
    • - Tenant/Buyer representatives generally add no additional cost to the transaction and often times make a positive impact on your bottom line by helping you avoid major pitfalls and advising you through the transaction from start to finish.   
    •  
    • - First Scout Realty Advisors has assisted tenants and buyers in all fifty states as well other parts of North America.  Please give us a call with questions or concerns and we would love to be the advil for your real estate headaches.