Commercial Realty in Columbia, Mo., likes to say, “to me
a healthy property begins when you secure the tenant,” to
which he adds, “when you have frank discussions at the
beginning, it is usually carried through.”
Two areas of contention that come up, Land suggests, are
the occasional tenant who doesn’t pay rent on time, and in
the triple-net world, tenants who don’t live up to their end
of the contract. Sometimes the problem is with the landlord,
who is just not paying attention.
“Occasionally, a client will tell me, ‘I have this great triple
net property.’ And I say, ‘have you driven by it recently?
You have trees growing out of your gutters.’ Triple net is
only a good property if your tenant is actually taking care
of things. If not, then you need to remind them of their
responsibility or take it on and figure out how to bill it back
As for being late on payments, it’s much easier to solve this
problem if everyone is communicating with each other. “If
the tenant starts to struggle and calls up to say, ‘my industry
is changing, I have a problem, but I have a plan as to how I
can succeed,’ you can work with that tenant,” says Land. “If
the tenant doesn’t communicate and just keeps getting later
and later in rent payment, that’s a different situation.”
He adds, “It’s amazing how many times I have had landlords
come to me and say, ‘this guy is four months behind in
rent.’ I say, ‘have you had any conversations with him?’ The
answer is no. So, I say, “do you think the tenant is just going
to wake up on the fifth month and pay you the other four
months?’ The minute the tenant is three days late or 10 days
late or whatever your comfort zone is, you need to be
Kevin Geenty, SIOR, principal in The Geenty
Group Realtors in Branford, Conn., has owned,
with a partner, a business park in the Connecticut
town of Old Saybrook. Geenty has kept the eight-
building, 240,000-square foot park for 27 years.
On average, the business park rarely shows more
than 3 percent vacancy, but last year there were a
number of downsizings and the vacancy rate shot
up to 30 percent. A number of new tenants will
the property. Below are Geenty’s suggestions for
keeping a property a healthy investment:
• Facilities manager has daily contact with tenants. In
addition, both owners visit tenants at least once a year.
• Tenant recognition program. Often an annual party.
Sometimes, it’s nothing more than having the local
Good Humor truck come by and deliver free ice cream
• Maintain landscaping. Pruning of shrubbery can be
important to tenant feelings of security as over-grown
shrubbery gives miscreants a place to hide.
• Maintain building and grounds. Activities should be
scheduled regularly, i.e., parking lot is re-striped every
three years, steel exit doors repainted every three years
to prevent rusting.
• Beware of copper thieves by installing exterior video
cameras to deter thieves. Each roof-top HVAC can be
wired for an alarm.
• Lease expirations and upcoming option renewal dates
should be in a “tickle” file so either situation can be
addressed ahead of time.
• Through active communication, anticipate if a tenant
is going to expand or contract. Be flexible and try to
retain the tenant that may be contracting.
• Maintain cash flow. If the rentals are not in the office
before a certain time frame prior to expiration of the
grace period, call the tenant as a courtesy to make sure
that the rent is received before the deadline to avoid the
onerous later fee, of, for example, 10 percent.
TIPS FOR KEEPING A
STEVE BERGSMAN is a
nationally recognized financial
and real estate writer. For more
than twenty-five years, he has
contributed to a wide range
of magazines, newspapers
and wire services, including
the New York Times, the Wall
Street Journal Sunday, Global
Finance, Executive Decision,
and Chief Executive.
ABOUT THE AUTHOR
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