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In some good news for New York City commercial real estate, an overwhelming majority of survey participants have changed their outlook on the fate of Lower Manhattan real estate post-Hurricane Sandy. Of more than 100 executives surveyed by accounting firm Marks Paneth & Shron LLP, only 6 percent said they believe property values in Lower Manhattan will drop in 2014. Last year, nearly a third of the respondents forecast a drop in real estate prices for the area.
Q: A tenant at my shopping center is unable to get the proper insurance that’s required for it to do business. It already signed a lease with me, but now it’s trying to get out of it, relying on “frustration of purpose” as a justification. What is “frustration of purpose” and can it terminate a tenant’s lease?
Some leases give the square footage of the tenant’s space, or they include floor plans with dimensions from which you can calculate the size of the space. But giving square footage numbers—or including a floor plan with dimensions—could be ammunition for a tenant eager to walk away from its lease or cut its rent. If the tenant can prove that your numbers are wrong, it may claim that you’ve violated the lease by misrepresenting the size of its space. The tenant may convince a court to let it out of the lease or lower the rent.
The findings from a recent CIT Group Inc. survey may make 2014 a little brighter for the CRE industry. That’s because middle-market commercial real estate executives are expressing cautious optimism toward the market and are looking to take advantage of long-term investment opportunities, which bodes well for CRE overall. However, the majority are finding that the current tax and regulatory climate is placing a strain on the performance of their companies.
The safety of your tenants and their employees and customers is vital to the success of your business—as well as to your peace of mind. You don't want to wait until you are faced with an emergency, such as a fire, to realize that you haven’t provided an adequate emergency response and evacuation plan to tenants.
Governor Andrew Cuomo has announced that New York State is increasing its support for Steiner Studios’ media campus project in north Brooklyn, bringing its total financial assistance to $11.3 million. The contributions will enable the largest film company outside of Hollywood to finance the $137 million infrastructure project that will convert the long-vacant naval hospital annex at the Brooklyn Navy Yard into a hub for media, technology, and film-related businesses.
Q:I'm negotiating with a supermarket tenant to open a supermarket at my center. The tenant owns supermarkets under various trade names around the country, and those stores operate either high-end (high-priced) models or low-end (low-priced) models. I want the tenant to operate a supermarket at my center under a specific trade name for a high-end model. But its lease form doesn't indicate which trade name the tenant will operate under at my center. What should I do?
Install security cameras not only to help you deter and catch criminals, but also to help you prove to a court whether or when a dangerous condition existed on your property. That's important because the length of time a dangerous condition has existed on your property where an accident occurred is a consideration in determining whether an owner acted reasonably. If the dangerous condition existed long enough so that you should have known about it, and you did nothing to make the area safe, the court is more likely to find you at fault for an injury.
If you’re like most owners, you’ll want your tenants to operate continuously in the space they rent from you. And why wouldn’t a tenant want to operate continuously? It is, after all, paying rent to use the space so it would stand to reason that it would want to bring in as many sales as possible. But, in some cases, a tenant might not care so much about this. For example, if the end of the lease is nearing and the tenant is focusing on getting its operations up and running at a new location, it might slack off at your center.
When you sign a lease with a tenant it creates a landlord-tenant relationship that can work in your favor, but also comes with some potential problems. For example, when a tenant defaults on its lease owners usually don’t have the option of terminating the lease immediately. The owner might have to wait a certain period of time for the tenant to “cure”—that is, fix—a violation. If a tenant is no longer useful to the center’s synergy, the owner must wait, sometimes for several years, until the end of the lease term to get rid of it.
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