All Forum Posts by: Michelle R.

@Josh Klauber I have done a few 1031 exchanges in the past few years (I am also from Brooklyn, and one property recently was a warehouse sale). You can DM me if you would like my advice at any point, I will be glad to help you best I can. 

If you have a warehouse building in the NY/NJ area, demand is very high right now. You should not sell your property until you have performed complete due diligence on one or two potential replacement properties to complete your 1031 exchange. There is a strict timeframe to name the property you will be replacing your current property with, and if you do not have this all lined up prior to selling your property, you risk the 1031 exchange failing. You can only name 3 potential properties to purchase and you must name them within 45 days of your property's sale taking place. 

Keep in mind, you are selling at what is a high historical price. Many/most properties being marketed for sale are similarly at a historical high price.

@Joel Owens Thank you for the well thought-out reply as always. The chiro is on a second floor with elevator. This would be a second location for the physical therapist, who has a long-term location in a nearby city. 

I don't think the chiro would leave over this as they would have to start from scratch elsewhere and have a client base in this neighborhood center.

My concern is I just may not be understanding the nuance between a chiro who certainly also treats the entire body, and a physical therapy practice. On a human level, I worry this would very significantly affect the chiro's livelihood. I just don't know if this is going to take away a small portion of customers, or a very large chunk.

@Jessica Zolotorofe @Stanley Bronstein Yep, that is exactly what the attorney said - better to ask first and who knows, maybe they will cooperate. He made the comment that '99% of tenants get upset because they feel they weren't even asked and should have been'. Well I asked, and the chiro was very unhappy with the idea of a physical therapist. The chiro said she does rehabilitation work. She felt it will have an effect on her livelihood and that it was a '"conflict with her contract".

The chiro has no exclusive right on rehabilitation in its lease, and with some tweaks to the language we could likely protect ourselves and bring in the new tenant. They have an exclusive right "to provide chiropractic services, including spinal adjustment and manipulation."

Now we are kicking back and forth internally whether to upset a long term tenant . We are new owners to the plaza but this tenant has been there nearly 30 years. 

I spoke to a commercial real estate attorney, and he had the same suggestion as @Stanley Bronstein - he said to approach the chiro and show them how the exclusive would be worded to protect their interests. The call went as predicted, they were very unhappy with the situation as they do rehabilitation and so does a physical therapist.  

The chiropractor's lease only provides them an exclusive on chiropractor services and spinal adjustments. It says nothing about rights to do physical therapy.

So, I will circle back with the commercial attorney to review the lease. We used our standard lease and had a different real estate attorney who is primarily focused on residential fill in the blanks pertinent to this deal. I think we will shift to using a specialist commercial attorney in future who would have seen this issue from a mile away.

Hi @Ron Fiscus- thank you for your input. What are some of the issues? 

We spoke with a property owner of a large commercial building who had this work done, and he was very pleased. 

I am wondering if it could be different based on ability of the contractor?  Or if you feel that sprayfoam in general is not a good choice?

We have a 90000+ square foot flat roof industrial building. The roof itself is not in great shape. There are walls between the sections of the roof which are probable causes of some leaks. 

We are considering to put on a spray foam flat roof covered with a silicone coating. There is a 15 year manufacturer warranty. In theory, in 15 years when the silicone coating is starting to wear down, another such coating can be put on top economically.

We are curious to hear if anyone has put such a roof on their building and what is your experience with it. 

The flat roof is already a second layer so it would be pricy to tear down the old roofing material to start again with a new first layer. The price of the spray foam roof and coating is approx $3.50/ft.

We have a 52,000 sq ft shopping center with retail and medical on the first floor, and second floor has professional and medical tenants. We have a chiropractor tenant upstairs who has been in the center over 20 years. They have an exclusive on chiropractor services and spinal adjustments. We have a prospect looking to sign a 5 year lease for space on the first floor for physical therapy. We would word the lease such that the physical therapist must observe all the exclusives of the chiropractor, and the new physical therapy user would not preclude the chiropractor from performing services involving physical therapy.

In your experience, are the two uses too similar to introduce the physical therapist? If there were to be any violation of the chiropractor exclusive on the part of the physical therapist, would the liability be on the new tenant or on us as landlord?

Would you feel it necessary to have a discussion with the chiropractor prior to signing the physical therapist? Keep in mind, these tenants are small in size in the grand scheme of things, with each having a 2% pro rata share of square footage.

Is there anything I am overlooking here?

Is there a link to the webinar? I missed it.

Thanks, all. Appreciate your advice very much.

Just not sure the best course of action here- attorney will say to proceed with legal means. We are already out $6000 in unpaid rents. I am not sure the tenant would have any funds in his estate being as he lost his house to sheriff sale.