• When is a Market Comp Not a Comp?

    A tenant came to us recently asking for help. They were involved in a transaction with another broker and were concerned about the objectivity of the advice they were getting. The tenant was looking for about 50,000sf of space and was considering a building that was a bit off the beaten track but in an otherwise desirable submarket. They had been back and forth with the landlord (who we will refer to as “Landlord A”) on proposals, and their broker was now recommending to them that they accept Landlord A’s latest proposal as it was “market” or even a little better. In support of his recommendation, and at the request of the tenant, the broker provided information on a number of “similar” deals (market comparables or “comps”) that had recently been done in the “market”. The tenant asked us to assess whether in fact the proposed deal was a good deal.

  • Why Landlords Want to Pay Commissions

    Let’s just make believe for a moment that landlords don’t pay other entities (both in-house and third party) more when a tenant representative is not involved. Let’s further assume, for the sake of this analysis, that the tenant representative isn’t able to negotiate any monetary savings (let alone several multiples of the commission, as is typically the case). The single biggest driving force for any commercial real estate investor is maximizing return; therefore, consider two scenarios from the landlord’s perspective:

  • What To Do When You Get a Notice From Your Landlord

    During the lease term, landlords will send seemingly benign notices to tenants, often through their property managers. Much like with the operating expense and tax reconciliation statements that we discussed previously, these notices require professional scrutiny.