Asking the right questions key to finding good space
Sure, in 2000, your typical office tenant was less concerned about the basics of landlord services and more interested in how large their sign could be on the top of the building.
In 2012, it is back to the basics and the landlord-tenant relationship has become ever more important. In fact, the tenant and their broker must be equally diligent in investigating a potential landlord and asking the proper questions to ensure the quality of the landlord service level is adequate and maintainable. Below is a guideline of the basic but imperative procedures we implement on behalf of office tenants as a full service commercial real estate firm.
Financial security: As most landlords request and verify financial credit of a tenant, the tenant should ask the same of the landlord. It is in the best interest of the tenant to request references, including the landlord’s lender or financier and existing tenants, to guarantee that the building is properly maintained and that the landlord is not only responsive but has the proper operating capital or maintenance reserves to correct building issues if and when they arise.
Experience: The tenant’s history of experience, business model and executives will be investigated, as should those of the potential landlord. Questions relating to the landlord’s experience, their duration of ownership of the specific property, the amount of real estate within the landlord’s portfolio, local versus absentee ownership and whether they employ in-house or third party property management fall within this category. The importance of these questions often relate to the proactive nature of the building owner and their degree of efficiency in physically maintaining the property, billing in an organized manner and controlling costs by maintaining competitive vendor relations.
Safety: In difficult financial times, inexperienced landlords will attempt to save money by eliminating security measures or prolonging property maintenance issues. Ideally, on-site security is the most prevalent deterrent of crime in or around an office building. Because on-site security is expensive or determined to be excessive in certain professional office complexes, the next best deterrent is that of proper lighting, well-maintained landscaping and paint. The combination of installing and maintaining these three items creates open, lit spaces that, even when leaving the office after the sun has set, assists in securing your safety. It is standard to request the landlord to detail security provisions implemented as part of their building maintenance and operating model.
The fundamental issues above are relevant to the state of the market. Although there may be one or two landlords in our community still offering perks to tenancy such as gym memberships, dry cleaning and auto detail services, it is the level of the basic landlord provided services that ensure a tenant’s quiet enjoyment. The tenant and their representation should focus on these three rudiments hand in hand with negotiating the terms and conditions of the potential lease. In doing so, the tenant discovers the people behind the bricks and mortar and will guarantee, to the best of their ability, the longevity and reputation of their future business partner, the landlord.
Scott Shanks is senior vice president and Dominic Brunetti is vice president with the office properties group of NAI Alliance in Reno. They were assisted in the preparation of this article by Chase Whittemore, an associate in the group. Contact them through naialliance.com.
The introductory 80-hour program — announced in May as one solution to Nevada’s oft-lamented skilled labor shortages — is designed to train people in construction, building maintenance and related trades.