Twitter Chat: Randy Mason on Power of the Tenant, Benefits of Subleasing
- Jun 24, 2013
CCIM- and SIOR- affiliated partner at Commercial Realty Specialists Randy (Randolph T.) Mason joined CPE editors for a live Twitter chat in 140 characters or less per tweet, lending his 22 years of real estate brokerage experience in leasing and sales of office and industrial properties throughout Orange County and a variety of multi-market firms across the country.
CPE: Is it best to lease a building or should one buy it?
Mason: That depends on the client’s growth plans & if they have the available down payment. When a company is relatively stable & has the excess resources, often buying makes a lot of sense.
CPE: How much negotiation room does one have with the landlord?
Mason: The more vacancy a landlord has in their building, the more negotiable. It’s smart to have multiple landlords negotiating against each other to create the necessary leverage for the tenant.
CPE: What tenant improvements are considered normal today?
Mason: On new transactions, landlords will usually provide carpet & paint along with moving or adding some walls. On renewals, carpet & paint and as little thereafter as possible. It’s all part of the negotiation, so be firm.
CPE: Does a sublease provide one a better deal?
Mason: If you can live with the terms that are included in the master lease, trust that the sublessor will be around to pay the master lessor, this could be a good deal. You usually need to take the space “as-is,” though. Read the lease!
CPE: In this economic environment, is one better off with a short-term or longer-term deal?
Mason: In this increasing economic environment, tenants are trying to lock in longer terms because rates are going up. Hold on, because rates are increasing & concessions are decreasing. If you’re a stable company, sign for a longer term.
CPE: Should a business owner consider SBA financing if they chose to buy a property for their business?
Mason: Yes! They do have additional fees, but the down payment is only 10%. Businesses can buy and conserve their capital.
CPE: Do tenants really have much bargaining power in large buildings when owned by a huge company?
Mason: When the building has a high vacancy rate, tenants have more leverage. If the tenant is financially strong and is taking a good amount of space & the landlord wants them, they do have bargaining power! Now go make a good deal!
CPE: Thank you for your informative Twitter chat participation, Randy.
Mason: You are welcome. It was nice to share some commercial real estate knowledge and tips.