All Forum Posts by: Genna Golden

I control/own the property and want to redevelop. He is master tenant and has one other lease in place. He has one vacant unit which he could lease out and has his own office space in one unit.

Quote from @Kristi Kandel:

Agreed, I'd start by reviewing your lease. How you proceed also depends on the amount of time left on the term of their lease. 

1. what does your lease say regarding termination without cause

2. how much time is left on the lease 

3. do they have automatic renewal options on the Tenant only or Tenant & LL

4. what would it take for them to relocate their biz? Perhaps you could find another location that is comparable or better to the current one to help out in the process. maybe you pay a portion of the relocation costs. maybe you help them wind down their business. 

Depending on the size of your master tenant (local, regional or national operator) you might want to just sit down with them to get a gut check on where their business is and where they think it's going in the next 1-5 years, 5-10, etc. Maybe they are looking for an out and this could be an amicable solution for everyone. 

Creating the relationship and making it more than just a transaction will likely go a long way. 

Thank you for info. "gut check" is right, and with resources in the area we could likely relocate him to a nice place (with more bathrooms) nearby. It needs to work for him or what would be his incentive to leave?
There are no lease termination clauses, and he has 3 years remaining. I'll start by focusing on what a move would cost him, and how his future rate would compare to what he is paying now. I'm trying to get his sublessor agreements, and although violation of the lease, so far he is not providing. I know those HAVE to terminate in 3 year when his lease ends, though he could have negotiated earlier lease termination date with them. I'm taking them into account too.

They will relocate their offices, likely across the street. ( I could pay moving expenses)

My master tenant is a profitable developer. I imagine his company income is good but varies upon project completion/sale dates.  I would note that I'm in a position to wait on demolition/construction until they move out at their original lease termination date, 3 years from now (I do make good cash flow on the lease). Therefore I'm not terribly motivated to make large concessions. (also initially he didn't ask for any concessions). I just have some forward momentum now with builders/investors and don't want to lose that. Construction could start 1 year from now.

Tenant has not minded keeping one retail space empty for quite some time but now states he has a business that wants to move in, but they could only move in for a 3 year period.  His business occupies the space as office space, and he could pretty easily move across the street. There are nearby office options.

from above, I'm not sure I understand how the quantity of money they are making per month would effect my concession or how that removes risk for him.

My lease DOES NOT have an early termination clause but originally he was fine with moving. There is no automatic renewal. Every lessee needs to be out by Dec 31st 2026.

HI, I have a commercial property with a master tenant and would like to terminate his lease early in order to develop the property. What would a typical concession look like? What is it based on? The termination date is flexible but he would need to NOT resublet one of the commercial units when current tenant vacates next year. My timing is flexible.

I could be interested in this. Let me know if it happens. I've been investing for 15 years and have commercial buildings. Currently working on a pro forma to develop a mixed use commercial building. Development is a different Beast!

If the seller wants to place a lien on the property to insure your payment, the banks may not finance a construction loan on a property with a lien.

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