Meet the Landlords: Tom, Dick, and Harry
They are all commercial real estate landlords, and if you don’t learn anything about them before you lease space, you might make a leasing mistake—a mistake that will cost you lots of extra money and stress!
My clients often ask me if they need a commercial agent. Let me share a few things about the landlords I’ve met during my career.
Just like in the TV series Dragnet, all of the following stories are true, but the names have been changed to protect the innocent (and not so innocent). Landlords come in every size, shape, and color; some are good, and some are very bad. Based upon the lineup below, which one would you like to lease from?
Let’s start with Tom. Tom not only owns commercial real estate; he owns a brokerage firm as well. Tom’s buildings are well maintained. If you call the property manager, whatever you need fixed will get fixed. Tom works quickly to get your lease proposals upon request. He will accommodate almost any showing. Once Tom puts together a lease proposal there isn’t much room for negotiation. Since we know that in advance, we can let your clients know what is going on. There are no surprises for the tenant when they move in.
Next up is Dick. Of course, when you come to meet him before moving in, he is all smiles. Prospects think he is a dream landlord because he always tells you what you want to hear. Little, if anything, is put in writing before the lease is drawn up. He hopes you are too naïve to hire an attorney to review the lease. Most prospects find him to be such a lovely person they have a hard time imagining that anything could go wrong. However, once you are in the space, Dick the Demon shows himself. He isn’t interested in people calling to tell him the foyer is slippery. He gets in arguments with anyone who calls about something that needs to be repaired. After a while, he finds someone on your staff who follows his rules, and that is the only person who is allowed to approach him with issues. Eventually, your firm gets tired of the hassles and decides to find a landlord who will listen to them, but unless you take Dick to court, you won’t get your security deposit back. Even though he loses most of his tenants at some point because of his own behavior, Dick continues to think your team is unreasonable.
Meet Harry. Harry’s buildings are so clean you can just about eat off the floor. If an agent is bringing in a larger tenant, Harry will personally attend the showing with the listing agent so that the prospect feels at ease. Any request, whether verbal or written, will be answered. His listing agent does a great job finding out what the client wants and figuring out how the deal can be made. This landlord follows through on everything. His staff has been with him for many years. Basically, he runs a clean and efficient business and is easy to work with.
Next up is Pat. Pat took over managing the family’s commercial building when her husband was put in jail. Let’s just leave it there without any further explanation. On my first call to Pat, I thought perhaps she lived in California because she was quoting $1.00/s.f. and Californians calculate the rent by taking the annual cost/s.f. and dividing it by 12 months. Therefore, the rent was $12.00/s.f. for an office building, plus lots of extra charges, which brought the cost up significantly if you knew the right questions to ask.
One of my agents had a client who was interested in Pat’s buildings. When she called her to discuss setting up an appointment to show the space, the agent was told she “had her skirt on upside down.” I believe there were some additional words used, but I can’t put them in print. You get the picture.
If you are wondering why I have introduced you to this cast of characters, it is so you can see just one facet of the decisions I make when helping my clients. If I have a client with a very limited budget, we may have to look harder to find landlords willing to lease the space out at a great deal. Then, if you request to see one of Dick’s or Pat’s buildings, I will warn you in advance what to expect. I can probably even give you prior tenants’ phone numbers to call and confirm the nightmares experienced at these buildings. If you are willing to take on a nightmare, at least you will be forewarned.
Meet the Landlords: Cave Man, Business Man, and Super Man
They are all commercial real estate landlords. If you don’t learn anything about them before you lease space, you might be making a leasing mistake. Why do you need a commercial agent? Let me share a few things about the kinds of landlords I’ve met during my career. Just like in the TV series Dragnet, all of the following stories are real, but the names have been changed to protect the innocent. Landlords come in every size, shape, and color; some are good and some are very bad. Based upon the lineup below, which one would you like to lease from?
Meet Cave Man
Cave Man leases the least expensive buildings anyone can find. If you visit them, you will find they are filthy and have lots of repair issues. In fact, the roof might even fall down while you are visiting due to lack of maintenance. The landlord might claim the space will be cleaned up upon possession; however, his idea and your idea of clean probably differ. Every time you think you have an agreed-upon deal, the deal changes. Your head is spinning.
Additionally, Cave Man is known for not paying his contractors. Sometimes things like the heating and cooling systems break, and he doesn’t have enough money to fix them. The adage “you get what you pay for” is a good way to think when dealing with this guy. If you just need an address and will only visit to pick up your mail, it might be a good match.
Meet Business Man
Business Man owns a business and has bought the building with room to grow his business. Business Man believes that his building is very special. He hopes that you think so too. He may or may not have taken the time to learn the correct way to charge for rent and related expenses. This could work to your advantage if he doesn’t charge for electric and increases in operating costs. He may not know the difference between rentable and useable space and may only charge you for the square footage in your suite. He could be offering you a great deal.
On the other hand, he may not realize or believe that the landlord down the street will give you one month of rent free for each year of the lease signed. It may take a little bit of extra work on your part to get this transaction set up, but once you do, you will be set for the term of the lease. If his business expands like he expects it will, expect to move at the end of your lease term. After all, he bought the building to grow his business, not yours.
And then there is Super Man
Super Man is also a Superman. His buildings are clean, his staff amazing, and his listing agents fair and easy to work with. I love showing my clients his space, because I know my clients will be taken care of over the term of the lease. I also know he will pay me my commission when it is due. With this deal, there are no tricks, no ponies, just great space, a fair rent, and great service.
If you are wondering why I have introduced you to this cast of characters, it is so you can see just one facet of the decisions I make when helping my clients. If I have a client with a very limited budget, we may look at one of Cave Man’s buildings. In this instance, however, we will negotiate terms that will protect our client. If our client wants to lease from Business Man, perhaps we can get some additional options to expand their space and some renewal options that the landlord can’t break. If my client wants to lease from Super Man, I probably will just make sure my client understands all the terms of the agreement. Super Man does make my job easier. If all the landlords out there were Super Men, perhaps Super Agents like me wouldn’t have super careers in helping tenants!