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Updated almost 10 years ago,
How do I negotiate new leases with my commercial tenants?
This question and will tell you just how inexperienced I am as a commercial landlord. As a quick background, we inherited one of the tenants when we purchased the property for our business use, then acquired the other tenants after we closed our retail business but kept the real estate as an investment property.
We currently have 3 commercial tenants whose leases have long passed their initial terms and have gone month-month. None of the leases have provisions for annual operating expense (ie CAM or NNN) adjustments, and my insurance and tax expenditures are increasing. So I need to write new leases with base rent plus NNN charges.
I have drafts of the new leases prepared, but I don't know how to present them and what the process is in regard to getting a response from them or negotiating with them. I assume there's some official wording I need to use in a cover letter to let them know I'm terminating the existing lease and replacing it with the new lease.
Additional wrinkle: they're in Nebraska and I'm in Arizona, so I can't do this face-to-face.
Any advice on how to proceed would be appreciated. If possible, I would like to do this myself without the aid of a lawyer. My lawyer approved the actual lease wording, but if I get him involved in the negotiations it could get expensive.