All Forum Posts by: Joseph Gozlan

 Two realistic options:

1) IF they deposit it in the bank, ask for bank statements. 

2) Ask to spend 2 weeks on-site at the beginning of the month to see how much cash they actually receive. 

 That's insane for a commercial property! These numbers are from the residential world. 

A commercial management company will charge you about 3%-5% depending on what's needed to be done on the property (how much involvement required) and they will probably charge additional commissions for the leasing when needed. 

 @Ronald Rohde anything commercial in Texas, you know I got you ;-)

Calling every other day kinda reveals your hand. 

Figure out what you're willing to pay if they don't empty the building and tell the agent you can pay X for the building as-is and the offer is on the table until you find something else to buy. Then, stop calling every other day and keep searching. 

If they get back to you before you you find something else, good. Otherwise, maybe you find something better that'll be less work and a better price. 

I happen to be a commercial AND business broker so I understand the complexity you are facing. As you mentioned, there are multiple variables to the negotiations. 

Here are a few things to consider:

1) The biggest consideration should go to your biggest expense: TAXES! Selling a business will be taxed, selling the building will be taxed and becoming a W2 employee (for your husband) will have tax implications as well. So, the moving parts of the deal might be pulling in different directions as it comes to the taxes HOWEVER, the buyer might be flexible enough to move numbers from one pat to another realizing for them the total purchase price remains the same. 

2) You mentioned it's an office. The office buildings are in a world of hurt since COVID blew up in 2020 and I don't think we'll ever see them recover to the pre-COVID levels. 

3) Run the What-If scenarios for the sale vs. lease. If the buyer want's to move to a cheaper, place, fails to run the business, succeed to run and need a bigger place, etc. How does it look for you as a landlord? Can you find another tenant? How fast? Will you have to keep paying mortgage on the building while it's empty? Can you afford it?

To answer you specific question, there are leases that are set in a way where the increases are X% OR CPI the higher of the two thus hedging from inflation. That said, I've never seen them on NNN leases (which already hedge you from inflation) only in NN and modified gross leases where the landlord expect to be impacted by the rise in inflation.

 Co-Star & CRExi are your best bet. 

 This^^^

I've seen plumbers, teachers, firefighters and dentists do CRE transactions. Your "day job" is irrelevant. That said, being handy and capable of fixing/building things could prove beneficial in at least two ways:

1) You can estimate more closely the costs of making changes/fixing/building which can help you make better offers. 

2) You can have better ideas or ways to look at a property and imagine ways it can be improved or repurposed. 

 A MTM lease is still a lease. There should be a clause in there for lease assignment and what the requirement are. As the landlord, you have to agree to the lease assignment or demand a new one (considering that it's an MTM) and that entails whatever deposit and/or background checks you may require. 

 While doable, there are 2 main challenges to overcome:

1) The big chains have the buildings built to suite. That Taco Bell is designed to be a Taco Bell, not a McDonalds or a Burger King. The big guys, don't like changing their design/workflow unless the location is absolutely one they have to have.  Which leads us to point number two.

2) If Taco Bell decided they can't be profitable in that location, why would any of the big fast food restaurants think otherwise? Remember, these corporations have real estate teams that do the research to figure out where to place the next restaurant. That would be a risk for that person's job to say "we can make it where the other big guy couldn't"

Realistically, you might find a local restaurant to take over or tare down the building and do a build to suite for another person but would be very difficult to get another fast food chain to take over. 

@Brian Moran how would you feel if anything happen and someone got hurt? Don't trust the internet for an answer to something like that, do as @Henry Clark suggested, call the local fire marshal, they won't charge you a dime and will give you the professional answer.