All Forum Posts by: Jacob W.

As a litigation attorney, and I don't mean this in a snarky way, I'm curious where everyone is getting their opinions on this topic? I mean, a filed lawsuit arguing to pierce a particular LLC is only worth the paper (of course most jurisdictions don't even allow paper filing of civil actions anymore) it's printed on.

As others have said, a firewall usually just requires fire-rated drywall on both sides of the studs separating the attic space. The sellers should be able to do the firewall pretty easily. Fire-rated sheetrock is available at all the big hardware stores. The seams typically need to be sealed with fire-rated sealant to prevent smoke from passing through seams. It's just red gunk in a big tube applied with a caulking gun. 

 Thanks. That's what we decided to stick with. 

 Those are fair points. We just extended a lease and kept it at the annual 3% bumps. 

I have a warehouse in downtown San Antonio I converted to office/retail suites about five years back. Most of our tenant leases have renewal options with automatic 3% rent increases each year. However, a few of the leases were for single terms, so renewal of those will be at market rate. The same applies of course to the occasional vacant suite. 

Is there language we can include in new leases and renewals for single-term leases that accounts for inflation that exceeds the 3% automatic increases? I'm not looking to gouge anyone, but if these higher inflation rates continue beyond next year it will of course reduce the real value of our revenue. 

Our building is in a part of downtown that is becoming more and more popular each year with lots of new multi-families popping up and many older buildings nearby being turned into bars, hip offices, etc... So I'm fairly confident in demand in our property remaining strong and only getting stronger in future years. 

I've thought about language that says rent will increase each year by 50% of the inflation rate (the previous year) that exceeds 3%. I.e., an 8% inflation rate in 2023 would result in a rent increase of the automatic 3% plus 50% of the remaining 5% of inflation for a total increase of 5.5%, if that makes sense. We would thus evenly share the pain of inflation increases with our tenant. Does that seem reasonable? Or should we just stick with 3% increases and note that renewals beyond this particular term will account for inflation during that term resulting in a fairly large bump in the next term? Anyhow, I'm grateful for any thoughts. 

I'm a commercial landlord and occasionally have had tenants complain about things that were their responsibility in the lease. I'll admit to early on being a softie and just taking care of it to maintain a good relationship if they're paying their rent each month. That's probably not a good approach and I've become more assertive in sending a screenshot of the portion of the lease showing it's their responsibility. 

Sometimes the lease is silent on a particular point of contention in which case I usually have our handyman take care of it. It may cost me a couple hundred dollars to avoid the drama, but I write it down and remember to add it to future leases and renewals and mark it up as a lesson learned. 

Good thread. I'm a commercial property owner in SA with a 19k foot office/retail building downtown that I converted from a former railroad distribution warehouse on a 1.9-acre parcel of which 1.5 acres is a parking lot. I'd like to do something else on the parking lot as our tenants and their customers only use about 20 to 30 of 100 spots on a daily basis.  

I'm playing with more conventional ideas like a 50 to 80-unit MF project, another one or two-floor retail building, and even some wackier lower-cost/commitment ideas like parking a dozen to 20 tiny homes along the parking lot perimeter for Airbnb and office rentals. It's a good problem to have but also stressful finding the right cash-flowing project in this time of volatility. 

I'm in a similar position though I do have a modest bank note. I deferred all my tenants' rent for April. I'll probably do the same for May though I will require CAM payments. I'm going to allow my tenants to chip away at those rents as they can with the caveat that they need to be repaid within a year. I may consider reduced rents after May for a defined period of time, say 6 months, with the understanding that the balance will need to be repaid within the year after the 6 month period ends. I haven't thought it through in detail, but I'll need to have some mechanism in place where if a tenant reaches some amount of gross revenue per month, that this arrangement automatically terminates.  

I use Quickbooks to invoice my commercial tenants. It allows tenants to pay via free bank transfer or by credit card. Unfortunately QB charges the vendor (landlord) the credit card fee, so I don't utiltize that option. Using QB for me is convenient because I use it for my accounting as well and everything is synced and coordinated. I use the $25 a month account which has plenty of bells and whistles for my needs. 

I agree with what Gaspare said. I would add someone with a strong marketing plan, unlocked listings on Loopnet, someone who gives bi-monthly emailed updates on showings with prospective tenant feedback, and someone who is prompt in responding to calls. 

I've had a few different brokers for commercial properties my family owns and they are a funny bunch. My current brokers are extraordinarily professional and do all things I mentioned above. Previous brokers were difficult to get ahold of, slow in responding, and didn't seem very proactive in marketing our lease spaces. Nothing more than hanging a sign. A broker can't create interest in a property if the market isn't there for it, but they can be proactive in marketing spaces to give the space the best chance of being leased or sold.