We represent both Retail and Office Tenants locally and nationally!
In the representation of retail tenants for the purposes of site selection, disposition and market positioning. Grillo Commercial Real Estate's Retail Tenant Services Team works closely with the retailer's real estate department to create and implement a strategic plan for store development. With a strong market knowledge, extensive contact base, and unparalleled research department, Grillo Commercial Real Estate executes this program in an aggressive yet fiscally responsible manner in which the retailer's growth objectives and financial goals are at the forefront. We work with national franchises as well as single family owned stores.
The value of having our Tenant Services Team at your side can be shown through the following example. The profitability of your business is directly impacted by the cost of leasing space--your occupancy cost. For example, a $1.00 differential in leasing rate in a 5,000 square-foot space over a period of 5 years is $25,000 for office or for some 15 year retail leases that's a $75,000. Wouldn't you rather keep that money?
But to achieve the most aggressive lease or purchase terms, you need to be in the same powerful and informed position as landlords and sellers.
Would you go to an audit without your accountant? Or to court permitting the opposing attorney to represent you?
Then why try to negotiate your own office or retail lease or purchase terms when Grillo Commercial Real Estate can put you on equal terms with landlords and sellers? Our proven track record in the commercial real estate market, along with our effective negotiating strategies, will achieve the most aggressive lease or purchase transaction on your behalf and save you thousands of dollars. And we only negotiate on behalf of tenants and buyers.
Best of all, our expertise comes to you at no extra cost.
Just as with a residential real estate transaction, a commission is paid by the seller (or landlord) in commercial real estate transactions, including retail and office space leases. That commission will either go in its entirety to the seller's (landlord's) agent, or will be split between the seller's agent and the buyer's agent, if the buyer is represented. In this case, you are the buyer (lessee) and Grillo Commercial Real Estate serves as your agent.
It will cost you too much not to be represented!
Tenant Representation for Renewing or Relocating!
To achieve the most aggressive lease transaction, it's important to plan ahead. Ideally, you should call us 18-24 months in advance of your need for office space leasing so there's no panic which can lead to decision errors. Together we'll design a space-need strategy with our project management team to meet your growth plans, work-force base, client base, desired environment and preferable location. Then Grillo Commercial Real Estate will search for office space that meets your needs, including unusual marketplace leasing opportunities that you can seize. Uncovering hidden commercial real estate opportunities is our specialty.
When you've found your office or retail space, Grillo Commercial Real Estate will negotiate the lease on your behalf, including such important factors as favorable conditions for lease renewal, expansion/contraction rights, termination options, and accommodations for possible subleasing, as your circumstances dictate.
We will also protect you from these common office/retail lease traps:
* A landlord's attempt to pass increased operating costs of the building onto you without limitation.
* The landlord's "right" to relocate a tenant at the landlord's discretion.
* A disclaimer in the lease about the building and the services (not) provided to tenants.
* Severe limitations or prohibitions on subleasing your space if you need to.
* Holdover penalties which could amount up to 200% of your existing rent when your lease expires.
* Percentage Rent that doesn't work within your retail proforma.
When it's time for you to exercise your lease-renewal option, we'll make sure that fair market value is really fair market value – and not the landlord's assessment of fair market value.
Tenant/Buyer Representation for Office Relocation
Almost painless relocation
Believe it or not, it can happen! The painful part is having to take time away from the running of your business to research something that's outside your area of expertise. But it doesn't have to be that way. If you're in need of relocating anywhere within the United States or just across the street, Grillo Commercial Real Estate can provide the help and expertise you need. And while the search for new commercial space is being conducted, you can continue to focus on what you do best: growing your business.
Strategic relocation
Guesswork is out; strategizing is in. Together we'll design a space-need strategy to meet your growth plans, work-force base, client base, desired environment and preferable location. Then knowledgeable Grillo Commercial Real Estate Team will search for the office or retail space that best meets your needs.
And in the end, a great deal on your next commercial property
Using our proven negotiating strategies and our knowledge of the national commercial real estate market and the ins and outs of commercial leases and office building purchases, we'll achieve the best deal possible for your retail or office space needs. After your transaction is completed we will still be there for you at anytime to answer any questions.
Want to expand at your current location?
Grillo Commercial Real Estate can help negotiate the best terms on a lease for available space in your current location. Our expertise puts you on an equal footing with your landlord by making sure important, favorable provisions are part of your lease and by saving you from typical office lease traps.
Front-end planning is the key to avoiding costly obstacles as your business grows. Grillo Commercial Real Estate can help you make a plan to cover your future office space needs by assessing your current growth, future plans, client base and market outlook. Your future office space needs can be covered by working these factors into the lease you negotiate now, including the very important 'first right of refusal' for office space in your building that may become available when you need it.
Or if you anticipate the need to move to larger quarters in the future, we can start looking for suitable space for you well ahead of the time when you'll outgrow your current location, avoiding the last-minute panic which leads to decision errors and costly holdover penalties, which can range from 150% to 200% of your last month's rent. With our experience in the national commercial real estate that we'd be glad to put to work for you.
Don't let your business growth be hampered by unfavorable lease conditions or lack of planning. By taking advantage of our in-depth experience and expertise, you'll be able to relax knowing that your office space needs will be taken care of in the future. Equally as important, you'll be able to focus on what you do best: growing your business
Tenant Representation for Retail is so critical to make sure you are protected in your lease as Landlords know that the aggravation for you to move towards the end of your lease may make you feel like you're forced to stay. Noone should ever feel stuck with a current landlord as there is someone else that may be willing to make major concessions to move a quality tenant to their location. Talk to a unbiased professional to give you a free evaluation of your situation.
We represent law firms, restaurants, accounting firms, chambers of commerce's, wineries, travel agencies, insurance companies, technology companies, oil and gas firms, renewable energy companies, and various franchisor's and franchisee's just to name a few. We believe we can help any Tenant no matter how large or small better than other firms due to our relentless dedication to our clients.
Credit to Commercial Lease Law Insider....................
The 8 worst kinds of advice landlord brokers give tenants
This influential landlord advisory service tells landlords how to draft leases that will, for instance, "give yourself the right to shut down electricity...and limit your liability for any damage the tenant suffers from an electricity showdown."Here,as everywhere else in a lease, landlords are protecting their interests at the expense of tenants.
Landlord brokers generally do a great job representing landlords. That's what they're paid to do, and it isn't easy. But you shouldn't be surprised to find that the advice landlord brokers are accustomed to offer doesn't serve your interests. Here are the eight worst kinds of advice you're likely to hear from a dedicated landlord broker:
1. "We can get you the best deal because we know the market." Bad leases are signed not because a tenant some how misses a great space but because the leases are poorly negotiated.
All brokers have access to Class A space and probably 98% of Class B space. Landlords must pay their mortgage, and they never know which broker might bring in a tenant, so they let everybody know about availabilities directly, through frequent mailings, as well as through real estate databases which brokers subscribe to.
Leases go wrong because costs soar higher than bargained for, because the leases didn't stipulate adequate performance standards for a landlord's performance in such areas as heating, ventilating, air conditioning, electricity and other services, because leases restricted a company's flexibility, imposed costs beyond those bargained for, and many other reasons – every one of which arise from the way the lease was negotiated. A badly negotiated lease often turns a "great space" into a bad deal.
2. "We can get you a great deal because we have a relationship with the landlord." If your company has the creditworthiness which suggests you can meet your lease obligations, then any landlord would love to have you as a tenant. The suggestion that you need some kind of "in" to do a deal is ridiculous. Landlords need the business of paying tenants!
What your company really needs is a broker who will represent your interests – not the interests of some landlord with whom they have a relationship or hope to build one. This is because many landlord draft leases offer blatantly anti-tenant terms, some buildings have a high level of tenant dissatisfaction, some landlords routinely violate lease terms, and there are landlords whose financial troubles could impair their ability to perform as provided in a lease.
When a broker entices you with claims of a special relationship with the landlord, you must ask whether such a relationship is consistent with an obligation to represent you. Will such a broker be free to offer full disclosure of all costs in a proposed lease? How about management practices that will affect you? Will a landlord broker be able to negotiate forcefully on your behalf if this means opposing a landlord from whom they hope to gain lucrative agency business? Of course, you want lease negotiations that are conducted amicably. This means insisting upon a professional approach, not trying to buy goodwill.
3. "We can provide great service because we have a lot of branch offices." One doesn't need branch offices to identify spaces in another city, because landlords list their availabilities through brokerage networks and databases. Landlords want everybody know about what they have, so they can start getting revenue as quickly as possible.
If branch offices are serving landlords, then they face a serious conflict of interest in their ability to protect you. After all, every landlord is a current client or a prospective client, and aggressively protecting tenants jeopardizes lucrative landlord business.
The key to signing a good lease is having good site analysis, good lease analysis and good lease negotiation and good follow-up. These depend on the calibre of the tenant representative, not the location of their offices.
4. "Don't rock the boat and upset the landlord." Landlord brokers often advise tenants not to negotiate aggressively, not to demand that landlords comply with lease terms and, once a lease is signed, not to insist on the rights provided in the tenant's lease. In a recent situation, a tenant has been paying $4 million in annual escalations, and the landlord is preventing the tenant's representative from auditing the billings as provided in the lease, yet the tenant's current broker – a landlord broker – has repeatedly advised the tenant that continuing to demand a proper audit would alienate the landlord. Tenants seem to be afraid a hostile landlord might become more difficult to deal with.
Yet in our experience, landlords respect tenants who know their rights and pursue their interests in a business-like way.
While it's true a tenant often needs a landlord's cooperation, it's also true a landlord needs a tenant to help pay the mortgage, and it's generally cheaper to keep a current tenant satisfied than to incur the cost and possibly lost income resulting from a dissatisfied tenant moving out.
5. "Hurry up and get the deal done." More than anything else, landlord brokers push tenants to get a deal done. These brokers will tell tenants that if they don't quickly commit to a space, somebody else will take it. Such pressure is especially intense in a "hot" market favoring landlords. One tenant, a major accounting firm, told us of being shown space by a nationally-known landlord broker. At virtually every location shown, the broker was mum on details but advised, "you'd better hurry up and make a decision, this space is going to be gone soon." The tenant soon decided that the landlord broker was not providing the service they sought, despite its branch offices, large staff and national reputation. The tenant moved on and selected a tenant representative to help them find a space that will serve their needs.
Hurrying into a deal risks neglecting comprehensive due diligence, overlooking costly drawbacks in a building, failing to properly analyze the risks and total costs of a landlord's draft lease – and signing up for a transaction which can become a serious liability to your company.
6. "Since you're such a big tenant, you have very few alternatives." Some of the worst leases have been signed by big companies probably because top executives felt they had to be in a particular building.
While it's true the number of large spaces in a particular area are limited at any point in time, this definitely doesn't mean big tenants must accept whatever terms landlords care to offer.
Getting a good deal, however, means big tenants must gain every possible bargaining advantage. Tenants must have a representative serving tenants exclusively – and not the interests of landlords.
It's critically important for a large space user to start the site search early. A million square foot tenant should start at least five years before lease expiration. Starting early means you'll be able to see more spaces and include options that require building from scratch as well as different options for leasing vs. owning. There are almost always more alternatives for large space users than you might imagine, including existing buildings in the same area that can be repositioned, buildings in a different area once considered off limits, and build-to-suits.
By developing viable alternatives, objectively analyzed in detail, you will understand your true costs and trade-offs. Only with this background can you know if a premium is being demanded for the solution you prefer, and whether it is a premium you think is worth paying.
Equally important, all this means you'll be able to pursue preliminary negotiations, and if they don't lead to satisfactory terms, you'll have time to walk away and begin negotiations elsewhere.
7. "The landlord's draft lease is boilerplate, standard terms." So-called "Standard terms" invariably mean pro-landlord terms because leases are drafted by landlords which are naturally protecting their interests. You wouldn't expect them to do otherwise.
"Standard terms" often includes tenant budget-busters like operating expense loopholes, mark-ups on mark-ups, vague landlord performance standards and no audit rights.
Don't be pressured into accepting "standard terms." A lease negotiation should be driven by your business objectives, not by a landlord's desire to avoid risk (and pass it on to tenants like you). Your business needs must be translated into lease terms to be secured during negotiations.
8. "Just focus on rent and workletter – let lawyers take care of the fine print." Many corporate executives imagine they've locked in their biggest costs by shaking hands on these two terms.
However, the rest of the lease is loaded with costs. There easily are 18 or 19 significant non-rent costs in a typical lease, many hidden, and it's contrary to the interests of landlord brokers to identify these costs – or do anything else that might jeopardize a deal.
Lawyers don't provide complete protection for tenants because they aren't trained to analyze, nor have hands-on experience with, business issues which are responsible for so many excessive lease costs. Lawyers don't claim to know how desirable or undesirable a landlord draft lease is from the standpoint of the current real estate market. Lawyers aren't experts on the economics of building operating systems. Lawyers aren't expected to know how various ways of charging for electricity will affect costs. Lawyers don't audit landlord billings, so they don't see whether particular landlords honor or evade lease terms – and what must be done about it. Lawyers typically review a lease without ever visiting the building, and many problems are missed because a lease didn't address certain things which must be seen to be appreciated – or avoided, as the case may be.
Best advice
Overall, the most common reason tenants seem to take bad advice from landlord brokers is that they're impressed by the big deals such brokers have done. But as talking points, big deals are meaningless unless they're good deals for tenants. The fact is that a substantial number of leases over 100,000 square feet have serious problems, even though these leases were reviewed by competent lawyers.
It's shocking to see how many large leases have inadequate operating expense controls, high-cost electricity formulas, mark-ups on mark-ups, vague landlord performance standards, weak sublease rights, limited audit rights and so on. In some cases, lease problems became so serious that heads rolled.
Best advice: when you're interviewing a broker, ask not about what deals a firm has done but about how a firm has protected tenants. You'll probably find out all you need to know about the deals while discussing how a broker analyzes sites, evaluates landlords, negotiates leases, negotiates other kinds of real estate transactions, monitors build-outs, audits billings and in other ways protects tenants. How else can you be sure that a broker and the resulting lease will protect your company's vital interests?
Why landlords treat renewal tenants
as a captive market
Renewal offers inferior to what new tenants are getting
Many tenants assume their lease will be renewed on reasonable terms and accordingly leave a perfunctory amount of time for the renewal to be handled. Then it turns out that the landlord's draft proposal involves substantially higher costs than anticipated. Because there isn't enough time to determine if a better alternative can be negotiated elsewhere, such tenants are stuck. That's why a lot of tenants, including Fortune 500 companies and national law firms, often end up swallowing a bad deal.
At the very least, you can bet that as a renewing tenant, your landlord will offer terms inferior to what is being offered to new tenants now. After all, new tenants are in the market shopping around. To attract new tenants, the landlord must be willing to match the competition in terms of rent, free rent, utilities, workletter, building systems, communications capability, security systems, electrical capacity, lobby appearance and other factors. But if you are a tenant interested in a renewal, the landlord presumes – and tends to be right – that you're not shopping around much. The landlord figures you're mainly concerned to avoid the cost and disruption of a move, and he can probably keep you in the building without offering you nearly as much as he offers a new tenant.
If you assume the cost and disruption of moving are so high that your only good option is to renew your lease, it will become your only option. You will be a captive market, and you could easily miss substantial benefits your landlord offers as inducements for new tenants.
Here's a proven strategy for maximizing the value of any renewal -- even if you are 100% committed to staying at your current location.
1. Use time to your advantage
You need to start early enough so you have time for all the normal phases of site selection, financial negotiation and analysis, lease negotiation -- plus time to walk away from a bad deal and continue negotiations elsewhere if need be. This means if you plan to renew at your current location, for a lease in the 50,000 sq. ft. range, you should be actively assessing your options at least 18 months before your target move-in/renewal date.
You could be in for a shock if you let time slip through your fingers. A well-known communications firm explored with its landlord terms for a fairly short-term lease renewal. The landlord agreed to concessions worth about $500,000. Negotiations concluded, but the tenant neither acted nor developed other options. Months later -- about 12 months before lease expiration -- they responded to their landlord and said they were ready to proceed. The landlord assessed his options -- particularly noting that the tenant had not developed alternatives -- and replied: "I'd like to proceed, but times have changed. The $500,000 we talked about isn't on the table anymore."
2. Understand your options in the marketplace
If you don't have a good idea what lease terms other tenants in the marketplace are getting now, then you have no way of determining whether a landlord's proposed renewal is a good deal or a bad deal. Your landlord's offer could easily be inferior to what tenants around Manhattan and across the country are getting, in which case it would qualify as a bad deal even though it might be an improvement over your original lease.
Rent and workletter allowance are just the beginning. Every bit as important are terms buried in the fine print, terms which can undermine what you assumed to be a good deal. For instance, the operating expense clause, electricity clause, use clause, sublease clause and all clauses relating to landlord performance standards.
A professional services firm planned on a lease renewal. They had a thirty-year history at their building. It was convenient for all the executives and for clients. They were reluctant to even consider looking at other options. After showing the firm many alternatives to their current location and developing financial models showing what the firm could expect to get in the open market, The Tenant Representation firm entered into negotiation with the tenant's current landlord. The Tenant Representation firm reduced the tenant's costs compared to ownership's initial offer by more than 20% in a rising market, and secured a variety of additional non-rent, operational concessions.
3. Use your inside knowledge of your current building and/or landlord's operations to formulate the terms of your renewal deal
As a long-time resident of the building where you plan to renew, you have a key advantage that can help you secure improved lease terms. You know the physical characteristics of the building and how it has functioned in the past. If you have always been dissatisfied with the way the common area lavatories look, elevator waiting times, how the HVAC system functions, etc., your advisor should be specific about these issues in negotiating your lease renewal. Seek specific quantifiable improvements. Calculate a reasonable dollar value for each improvement to be made and stipulate a penalty or consequence if changes agreed upon are not made within an agreed-upon time period. Implement the changes agreed upon with effective business terms in your new lease.
4. Analyze your current lease in terms of business and operational terms that have been inadequate, too costly, not operated as you expected and intended they might.
If, during your years in this building, you have had a real estate advisor who regularly performed detailed annual escalation audits, you have additional inside information that can be extremely valuable to you in structuring a lease renewal. Done properly, these annual audits show you how efficiently your landlord runs the building, what the mark-ups are for certain kinds of important as well as incidental services you may require. Moreover, these audits will show you whether your landlord bills twice for the same services, whether you are paying for services supplied to other tenants, whether your landlord uses insurance reimbursements as a cost center, and how your costs compare to the market. Use this information in improving critical business and operational terms during an extended lease term. In the hands of an effective tenant representative, the data generated by these audits gives you a second chance to secure the lease terms you really wanted the first time around.
5. Let your landlord know you are actively seeking alternative solutions for your space needs.
Preserving good relations with a current landlord is often cited by tenants as a reason for "going it alone" when it comes to handling a lease renewal. The unfortunate effect of such a strategy is that it reinforces ownership's belief that you have no options and don't take the prospect of lease negotiations seriously. It's a clear sign that you are prepared to settle for whatever is offered.
Handling a lease renewal should be treated like any other business operation -- the management team makes a reasoned assessment of all relevant options and selects the best fit. It's important to let ownership know that this is your approach to whatever terms they might offer -- or expect you to accept in a lease renewal.
Early during one renewal negotiation that we handled for a tenant, we spoke with the landlord about various concessions that we sought. The landlord readily acknowledged that at the rent levels we were discussing, he would give a new tenant a full build-out, six months free rent, and certain other favorable terms. To our tenant he proposed virtually no work and no free rent. His reasoning: "They're here already, and they don't need it. Maybe I'll give them some new carpeting." Note that carpeting would have been worth about 10% of the concession offered to other tenants paying the same rent.
We let ownership know that we expected our existing tenant's dollars to purchase just as much in leasehold value as a new tenant's, and were prepared to seek the most cost-effective alternative in the marketplace.
When a landlord understands that you are having a tenant representative objectively evaluate the marketplace, they are likely to become more realistic about what you renewing your lease is worth. By making sure ownership knew our tenant was serious about its options, we ultimately secured concessions very similar to those being offered to new tenants, and a more favorable rent structure.
6. Understand what it will cost your landlord if you move out.
A common stumbling block in renewal negotiations is the undeniable fact that no matter how a good a deal you will get by moving, you will also incur costs that may be substantial -- the cost of the physical move, new telecommunications wiring, perhaps costs of building out their new space that go beyond what ownership will supply, new stationery, perhaps new furniture, etc.
Yet the landlord, too, will incur substantial costs if you leave for more favorable terms elsewhere. For instance, potentially lost revenue, promotional costs, brokerage commissions, infrastructure refurbishment, demolition costs and build-out costs. In every situation, these costs can be quantified with a high degree of accuracy, and should be part of discussions with landlord to maximize the value you get as a renewing tenant.
The differential in these costs -- what a landlord will spend to attract a new tenant, and what they will spend to retain you -- can be substantial, and easily exceed a year's rent. With an astute tenant representative and a properly structured negotiation -- some portion at least, of these savings, can be used to further reduce your costs should you elect to renew at a current location.
7. Be prepared to move if you can't get market-rate terms.
Ultimately, if your analysis of the market, taking into account all relevant factors shows that a substantially lower present value occupancy cost will result from moving, this is probably the option you should select. Moving for marginal savings – 2% or 3% -- might not be warranted, but if projected savings are 5% or more, this is likely to be your better option. No matter how specialized your facility, no matter how convenient its location, no matter what the cost of build-out, if a comprehensive site selection process, financial and lease analysis shows you can get better terms elsewhere, it may be time to move on. Occupancy costs are often the second largest fixed cost a tenant faces; in total they may consume up to 50% of net revenue. Managing occupancy costs is a critical corporate responsibility. When landlords understand that lease renewals are not a "sure thing"; when tenants regularly subject lease renewals to an objective, market-driven process, the result is likely to be reduce occupancy costs across the board.
