All Forum Posts by: Michelle R.

This morning I sent an email to a tenant who is late on November and December rent, with January coming due. I deposited their November rent check which came on 12/20 and it bounced. The email stated they must become current on at least November and December with a strict deadline. They had a previous bounced check as well. About 2 hours later I received a call from the tenant's son stating his father is on life support in critical condition. What is my next step? This is a dental practice which has only the one dentist, a hygienist, and receptionist working there. The tenant's home was sold at sheriff's sale several months ago. I checked Pacer and he has not filed bankruptcy as yet. His son is an attorney. We just bought this property six months ago and it barely meets the DSCR. We have never been in this situation before so I am hoping for some advice before I reach out to our attorney.

@Cody L. We are looking to bring on a full time handyman to do repairs at our properties. Here in New Jersey, the large company from which we bought a shopping center recently pays their handymen about $20/hr. I am wondering where do you recruit? Craigslist seems more suited to this than an Indeed.com but we have met lots of shady people from Craigslist. Also, do you pay any benefits? If you require them to travel from one of your properties to another on a regular basis, are you supplying a company car or requiring them to use their own car and reimbursing travel time/gas?

Thank you in advance for any tips you can provide.

I self manage a few properties and am coming upon leasing up two units. 

One is 45,000 square feet, the other 2500.

I am looking for input as to whether you run: 

-personal credit report

-business credit report

-request tax returns for personal and business

All of the above?

Thank you @Jessica Zolotorofe. I think that is really good advice.

@Kim Hopkins Checking in for an update- did you change leasing agent? We are in same boat - 6000 sq ft warehouse/flex unit sitting vacant for months. In our case it looks like the agent is just way too busy with his sales deals to focus on this smaller lease deal. 

We bought a shopping center two months ago. It's our first shopping center, after previously owning 4 warehouse/flex industrial uses. 

The center is very well maintained with tremendous upside- the previous owner was a big company focused on its development business and neglected this center (it was its only shopping center), such that it has about 68% occupancy. We already have one lease contract out and have been canvassing to fill our other vacancies. Some of our canvassing has been to put in a dance/fitness user.

We have one tenant whose lease states that the "Demised Premises shall be used solely for retail purposes to operate a casual dining restaurant/cafe".

This tenant is new to the shopping center as of a few months prior to our taking ownership. He has really brought a lot of traffic with his cafe. He has live music several times a week, has theme nights, like Mexican Food night- this is all great and within the terms of the lease.

The tenant had a zumba night one week ago for the first time, and just posted to social media that they are starting a weekend early morning yoga series. On Saturdays directly in front of his storefront he has had a third party sell fruits/veggies. This farm stand does block up part of the sidewalk. The neighboring businesses state they are fine with the farm stand but it also deviates from the permitted use in the lease. We have two other tenants (a bakery and sports bar) who the previous owner prohibited from having tables and chairs out for customers.  We have maintained the same stance. So, it's a bit of a contradiction to allow the farm stand but not the actual paying tenants to have tables and chairs outside. 

Am I being petty if I call and put an end to the yoga and dance events the cafe has been having? It's prohibited by the lease so we are within our rights to do so. I hesitate because this plaza had been stagnant for years and this tenant is bringing customers to his cafe which has brought more customers to the other tenants.

Do any of you landlords/property managers have cafes that also run fitness or yoga events? Just looking to get some thoughts as we are unsure how to treat this.

The leases all state they they are Triple Net leases. The previous landlord was regardless performing repairs of doors for the tenants, and billing the repairs of individual units to all the tenants as a whole. The leases state tenant is responsible for all repairs. We have a good relationship with seller and will call them for more specifics on Monday.

I am wondering if retail/shopping centers typically have this way of doing things- are doors considered structural and so serviced by landlord instead of tenant?

It's all billed back to tenants in the end. 

I will reread all leases. 

We just closed last week on a neighborhood shopping center. We have 16 tenants at the moment and the center has 30% vacancy.

There was a heavy rain the other day and water came in through a tenant's back door frame. A tenant called to put in a work order. This is not due to a roof leak, which as the landlord, we would take responsibility for fixing. The leases state that the repair obligation is at the tenants own cost and expense.

This is our first commercial NNN property so we are unsure which repairs the landlord typically handles. To my understanding NNN means hands-off, tenants handle their premises, landlord handles issues external to the leased premises. Do doors, hinges, door lock issues typically get attended to by landlord and billed out to tenant in a NNN lease? (Being as doors are part of the exterior of a building?)

The previous owner used to repair doors hinges, etc for the tenants. It looks from their work order summaries that they were billing this out as general maintenance to the entire center and not to the individual tenant, at a rate of $72 an hour. 

We are concerned the vacancy is partially attributed to heavy CAM costs. ($8.75/ft of which $3/ft is taxes - Central NJ).

Options are :

-Keep doing what previous landlord did. Hire out the repair from our management company, bill it to the shopping center with a markup for our effort. Expense it to the CAM of all tenants as a group, not just the specific tenant who had the issue. This elevates costs for everyone, bringing the tenants' business expense onto the income statement of the property. My hunch is they did it this way so they wouldn't have to charge and collect from individual tenants.

-Bill it out directly to the tenant. We are having to find providers and be responsible for their quality of work, and now collect from the tenant.

-Send a letter to tenants that going forward, these issues are on them.

Thanks, both of you. I will bring the depreciation recapture to the attention of my CPA for the 2017 extension. Good to know the failed exchange would be for 2018. 

We have a property sold end of December 2017. If we were to not procure a replacement property by the 180 day mark in June 2018, there would be capital gains owing. Would we pay the capital gains for tax year 2017 or for tax year 2018? Asking because the tax deadline for 2017 is next week and wondering if this can be put off til 2018. Thank you in advance for any help.