All Forum Posts by: Taylor Hazard

Gabriel I can refer you to one of my partners that specializes in Rochester. Can you PM me the property address?

Without any more knowledge than what’s contained in your post it’s an envious position to be in and there are a wealth of options available to you ranging from a joint venture to self performing on a new development to long term hold.

The only people who will be able to accurately answer your question are a licensed appraiser or a broker(s) who specializes in land or commercial/residential properties. Apps raiders are going to give you a straight over tackle value whereas the brokers will often incorporate more intuition based on their knowledge of current state of the market. For example: an appraiser will not take into consideration googles announcement, only sale comps and competing properties.

Often times the correct answer is a mix of both inputs.

All that said $200k sounds low and I don’t think anybody here would recommend taking any action before at least getting an appraisal.

*Listing it online in places you have access too. Vast majority of commercial space is listed on Costar. 

First step is to educate yourself on the medical office market in your area. Certainly you need to know if your estimation on market rates are accurate but also if the dentist can up and leave to a space across the street. 

Best bet would be to interview some medical office brokers, let them know you have identified a property and may need to hire someone to list it. They will give you all relevant data points and then, should you need to fill a vacancy, you will have brokers ready to go. 

Add a contingency in the contract tied to the execution of a new lease with the Tenant. If the Dentist balks at the higher rate offer him a teaser rate for the first year that bumps to market in year two so he can adequately plan for the increase.

Not only is it expensive and cumbersome to relocate a dentists office but his patients are likely all local to the neighborhood and relocating may see him lose business. What is the vacancy rate for medical office space? Is there competing space down the street he could move or would he have to travel far to find a new space? Could he find space in 60 days if you terminate the mtm lease? 

You could add a clause to the contract allowing you to market the space while its under contract, maybe you find a new tenant but most likely it motivates the dentist to sign a new lease. 

Interview and hire a Broker specializing in office in your submarket.

Sounds like you have had a couple bad interactions, having worked in a big 3 brokerage house in two different cities I can confidently say your experience is isolated. That must be frustrating. 

Agreed with all other responses... red flag for sure, NDA should solve the issue. At the end of the day you can add all the disclosures and CYA statements you want to the lease, if your tenant is doing something illegal your building can be seized. 

Does your state produced a standard template form? Colorado for example has standard state approved forms that 95% of transaction use. 

In WA we have CBA (Commercial Brokers Association) which produces leases, PSAs etc. and most people use/accept their docs.

Check with with the department of licensing for CA or local trade groups. 

It sounds like your confident in your ability to directly lease it, which is great. In the event that you hire a broker it is industry standard practice for leasing commissions to be baked into the lease rate and usually amortized over the term of the lease and often times with a standard cost to capital added annually. 

Most every landlord makes paying fees revenue neutral.

Good luck!