Orlando, FL · Member since 2015 · 33 posts · 7 votes
So I came accross a deal for a Single tenant industrial warehouse space for a major package distributor. AA+ Credit and very well Global recognized name. Their original lease was for 10 yrs, and it expires in 3 years. The price is very good, with a great cap rate, but how can I negotiate a resign of the lease before I buy it? If the tenant decides not to re-lease, I'm left with a large 30-50 GLA empty!
Those of you that have done industrial, any suggestions?
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
9y
I would have the Seller sign a new lease with Tenant. You can be active and demonstrate you'll be a great landlord based on your history/experience, etc. But If the Tenant doesnt need to renew, there's little leverage depending on your particular market.
Real Estate Broker · Lansing, MI · Member since 2015 · 90 posts · 53 votes
9y
You may have to offer some sort of incentive. I've had a seller approach the tenant offering to let them sign early to ensure they wouldn't get their rent raised by the new owner. I also had a client that needed get their tenant locked in for another 5 years in order to have the property refinanced. They ended up making a deal with them where they resurfaced the parking lot in exchange for renewing early.
If they plan on staying anyway you hopefully won't have to offer them too much.