LET'S TALK LEASES
Bisnow Houston stopped by a Continuing Legal Education conference this week to learn how the economy is affecting CRE leases. JLL’s Bruce Rutherford says the economy is very favorable to restructuring leases, but brokers need to keep in mind that the new contract must please both landlord and tenant. He says realizing which leases are best suited to renegotiation is key—if rates are above market but falling, jump in. Landlords will want to extend the lease before rent drops further, and tenants will want a rate closer to market. Bruce stresses the importance of a single point of contact: one person from each side should be involved in discussions.
Dallas-based Fuller Group Realty Advisors’ Clint Fuller tells us small business owners are tired and want to sell their businesses. Thus, his clients are signing longer leases (5-10 years) with as many options as possible, to make them appealing to potential business buyers. The sublease section is a focus, as tenants want a smooth transition. Clint reminds brokers not to allow market-driven language in leases; the lack of control could land your client in trouble.