Advanced Preparation for Departing Tenant in 18 months
Commercial tenant has given us advance notice that they will be departing in 18 months. Is there anything we could do now ahead of time to try and smooth the transition? I’m thinking it is too early to start looking for a new tenant.
[{"id": "icdl4md", "text": "Market it now because it could take you 24 months to lease it, depending on market and property type. If you have desirable space someone may be willing to buy out the departing tenants space. And it also means you can force this tenant out if shenanigans erupt in the holdover period. It is much easier to sue for economic damages when you have actual economic damages. \n\nBut it is your space and if you want to put up a sign three months before expiry go ahead.", "replies": [{"id": "icdn065", "text": "Would you market it informally or straight up?", "replies": [{"id": "icdqzef", "text": "Are you going to list it yourself or through an agent? I guess it depends on the size. Listing it with an agent now means that they can look at tenants expiring in the next year or so and direct them to your space to do both sides. Plus it would get their name on a building for sign calls to others, and get it on the listing services now so it will pop up in surveys and just kind of remind people you exist, providing it is not super small. \n\nIf you were just going to do the Craigslist route, not much benefit of listing it now, but putting a sign on the building now lets the existing tenant know you want them out and may sour relations if it is an image conscious company or they haven\u2019t told their employees yet. \n\n18 months seems like a long time, but I know office tenants look out two years before their lease is up since it can take awhile for build outs. \n\nIt will go quick and then your money stops rolling in and you will feel like you have to do the next deal.", "replies": [{"id": "icf6n52", "text": "It\u2019s a 20k sqft medical space so it will take some reconfiguring that can\u2019t happen until it is vacated.\n\nDefinitely lease through an agent", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "icdtb4l", "text": "Is your question related to the leasing aspect of your property and finding a new tenant or about your rights/ expectations for the space when the tenant vacate ?", "replies": [{"id": "icf6k3w", "text": "Leasing, I would like to hold on for the next 10 years and would highly prefer it to have some income. I want to plan ahead but don\u2019t know if corporations look that far ahead", "replies": [{"id": "icfbxob", "text": "1) What type of property is it? retail, industrial, office? \n\n2) How is the demand for space in the area? \n\n3) Is it a landlord or tenant market?\n\nFew ideas:\n\n* It might be a good idea to do a market research now to get some answers for the questions 2 and 3 above.\n* 18 months is a long time for most of the tenants, the process of finding new space is initiated around 12 months before expiry date\n* if you want to engage a broker in your area to lease your space it might be a good time to start the discussions now\n* research about the market rates now and try to predict the basic rents 1.5 years in advance\n* if you can , prepare a CAM budget for the next 1-2 years. If you plan on doing some capital projects that will affect the CAM rates you may want to delay them to keep your CAM charges competitive in order to charger higher base rents. Higher base rent equals to higher NOI and higher valuations", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]