All Forum Posts by: Nikolas Engel

@John McKee thank you! 

How do you usually go about validating a personal guarantor? What documents do you routinely ask for, what percentage of income/savings in relation to rent obligation do you apply? Would love to hear from a more experience landlord how to approach this topic in general. Thank you!

Hello BP,

We bought a retail building last summer and inherited a small beauty business as a tenant. There have been no problems with paying rent. As their initial lease comes to an end, they want to exercise the option but change the personal guarantor. I asked for last two years of tax returns from the individual in question - now he is asking me for what amount I am looking for in his returns before sharing. He says that if that amount is not supported by his income then we might as well stay with the personal guarantor in place. 

This is the first time for me to deal with the validation of a personal guarantor - I believe that in order to qualify as a personal guarantor he needs to proof that is able to consistently produce monthly income of at least base rent plus NNN from a source not connected to this beauty business. Would you suggest to make him a co-guarantor to the existing guarantor in the case his income does not support being the only personal guarantor?

Any feedback on my approach? How do you usually validate a small business personal guarantor in your retail spaces? 

Thank you very much for sharing your experience! I deeply appreciate it!

@Tiffany Colvert and @Henry Clark

Thank you both so much for your responses! 

Communication with their lead is key and we already met on site, thank you for reaffirming this issue!

And also big thank you Henry to remind me to look closely at the notice period to vacate. That is an important feature to consider, how are lenders usually deal with such a clause?

Hello,

I wonder if anybody is leasing space to the US Army Corps of Engineers (USACE)? 

I am at the beginning of putting together a Lease Proposal for an Army Recruitment Center. It seems to be a fairly complex selection process and I won't know the outcome for some time.  I trust that our property is a strong contender in terms of location, quality, parking etc but there are a few competitors so you never know....

I would like to ask for any insight/lessons learned you had during your application process with the USACE. This is my first encounter with a potential Government tenant and it seems like there are a lot of written and maybe unwritten rules in place. 

Any thoughts are deeply appreciated - thank you!

@Tiffany Colvert, @Courtney Nguyen, @John McKee, @Ronald Rohde

Thank you very much to all of you. Your comments help a lot in this situation and I will ask for proof of tenants statement of slow business.

Just for me to understand, asking for tax returns is not too intrusive and normal business practice? 

Hello all,

I am in negotiation with a small business tenant (beauty sector) of a commercial retail property we bought last year. The property has several suites, tenant leases 1,200sf, initial lease term comes to an end in Summer with one 5 year option at 10% rent bump. Tenant now requests a reduction citing a slow down in business. At same time, tenant wants another option written in agreement. 

I am not sure if there is substance to tenant's request or not. In general, I am open to support small businesses through hard times but I do not want to be taken advantage off.

How do you deal with a situation like this? Do you request financials from tenant to prove claim of slower business (If so, what kind of documents)? Do you consider offering a different schedule for rent increase , e.g. offer to remain at current lease level for 2 years, followed by a significant raise (larger than 10%) for remaining 3 years?

My overarching goal is to have the property perform at peak in about 4 years when a refinancing is scheduled. 

Thank you for sharing your experiences!

@John McKee, @Ronald Rohde, @Joel Owens

Thank you so much for your replies and support! Great to get some thoughts on this issue!

Which national listing brokerage are you working together? I assume that such a brokerage with a regional office could provide the local expertise and the national network to promote the vacant spaces? Will look out for able and ambitious brokers, thank you Ronald!

Joel, thank you for letting me know about void analysis. I have not heard about that before and a quick scan showed quite a bunch of tools to do one. Do you have a recommended tool or even provider you like to use to carry out such a void analysis?

Gentlemen, again, thank you so very much!

Good day,

We hold about 12,000sf empty shell retail space in a suburb of Portland, Oregon. We do have a leasing broker for the space but interest has been low. I would like to learn more about commercial leasing brokers fellow retail owners use and can recommend, especially when it comes to successfully market the space towards national companies. 

Thank you so much for sharing your experience! 

Nikolas

Good initiative, please keep me in the loop. We are investing in commercial real estate, mostly MFH and retail in the Portland, OR and Vancouver, WA area. I would appreciate the opportunity to bounce some ideas and thoughts with other commercial real estate investors from the area. 

@Jay Hinrichs

I am sorry to hear about the death of your project lead. 

Any motivation to take the project of the shelve? I would be interested in learning more. 

Thanks, Nik