Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Landlording & Rental Properties
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 7 years ago,

User Stats

203
Posts
50
Votes
Uwe K.
  • Milwaukee, WI
50
Votes |
203
Posts

Seeking input on which tenant to choose (small office)

Uwe K.
  • Milwaukee, WI
Posted

Looking for some opinions on the following situation. I know there will be no right or wrong answer:

Small office building, and upper floor has three tenants. A + B with me for about 1 and 1.5 years respectively. Good tenants, mostly no complaints. Tenant C recently moved out. Now A + B are interested in jointly renting the C space for meeting, training, whatever. Alternatively I may have other new tenants to choose from. Which would you pick based on the following?

A (while also speaking for B, presumably), bugged me already before availability of the C space that they want to  use it. When it finally became available, he said they were still very much interested for mid October start, latest 11/1. Ok, all good, I didn't bother advertising since it sounded like a pretty clear decision.

Now (in a simplified version), they  are dragging their feet, have note rented, have not reviewed the lease draft from weeks go, and wasted some time that I could have advertised already. There is some indecision, possibly funds availability (or rather willingness to spend it) seems to be an issue from talking to A. We're talking small businesses and a rent amount of $750/month.

With that background, would you rent to them, or a new tenant? My thoughts:

- Con: They are indecisive, and while they now say they have the funds, I don't know how long it holds up. What if in 6 months they flip and decide they don't need it, don't want to afford it anymore? 

- Pro: They have been good and reliable tenants, I probably don't have to worry about much.

- Con: What if they part ways for whatever reason? One wants to move out and doesn't need the space? Will the other continue? The lease is written accordingly, of course (jointly and severally liable) . But as we know, that situation can always create headaches and can cost time and money.

- Con: With a third tenant, I can diversify the risk: If one tenant moves, only one third of the space is empty.

- Pro: The new tenant is still an unknown. Will they stay? will they pay? Will they create trouble?