I will be partnering with 2 others investing in a commercial building with 4 leasable spaces. This is primarily a passive investment but want to cover all my bases. One of the partners will be leasing a space for a reduced rate for his existing business. He has mentioned subleasing some of his space for extra income. Recently he has become more aggressive about the subleasing of his space while he continues to run his business simultaneously. Myself and other partner want to put something in his lease limiting the sublease income he can take before his rent increases.
We are all new to this so any feedback and suggestions from similar situations or experienced investors would be much appreciated. We are coming down to the wire on this and need to get a contract together.
Is this soliciting for a security or active JV? I'm not letting any partner lease below market rates. Post some numbers, but I wouldn't let one partner earn more on subleasing, period.
Is this soliciting for a security or active JV? I'm not letting any partner lease below market rates. Post some numbers, but I wouldn't let one partner earn more on subleasing, period.
I would definitely have him paying market rent and no subleasing. If he is below market how does that benefit you or the other partner? Him subleasing how does that benefit you and the other partner. Is this a Joint Venture or is he a GP and your LP's? If its a JV this makes zero sense. He is the only one benefiting on both these portions in the agreement.
Best of luck. And good learning experience for future deals.