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nmarcus · Apr 18, 2007, 07:58 PM

I am the last renter in a 12 unit commercial rental property. As each lease ends, the offices move out.
I have a lease until 4/1/2011. It has been verbally 'suggested' I am welcome to leave early, not an eviction. After looking for 3 years to buy, I found a place. The real estate rep for my landlord (the hospital across the street) has told me I will be compensated for a similar buildout of my office and free rental for up to one year. They plan to tear down the building for future medical arts bldg.

I have now submitted my bids and estimates for renovation as requested, totalling $129K.
They have offerred 25,000 cash and 12-18 months free rent, value $10,400.

What sort of recourse do I have to ask for more? I do not have enough liquid assets to renovate and am looking to financing this retrofit with ADA compliance, etc. and am staring at a 3rd home equity line to do it.

What is the procedure to counter? Is there a formula? I have until 3/31/2011 and approx. $41,000 more rent to pay. Do I a valid position?

Help!!

Cvillecpm · Apr 19, 2007, 03:52 AM

You are failing to factor in the cost of your new purchase NOW v in 2011 which it will be MUCH MORE AND the tax advantages of owning your own office NOW.

Offer to split the difference between your request and their offer AND make sure you make them aware that your purchase opportunity has a time limit. You should have a GOOD commercial real estate attorney negotiating for you.

nmarcus · Apr 19, 2007, 05:01 AM

I have already purchased the property as of 1/30/07. So I now am incurring mortgage, taxes, electric, loan toward the down payment, plus my current lease. In addition, I have already paid architects, surveyors and some legal fees for variance. They know I have purchased and have contractors asking me to sign agreements that I've put off for as long as I can without losing their confidence in our plans to move forward.

Does this additional info give you more insight for my problem?

ScottGem · Apr 19, 2007, 06:51 AM

I'm not sure I'm following here. You have a lease to 2011. The landlord (the hospital) offered to pay your expenses to build out your new offices and free rental (where?). This was in return for vacating the building early so they can rebuild something? You have purchased a site but they are reneging on their agreement offering a fraction of the buildout costs?

Do you have any of this in writing? Have you consulted with your attorney?

nmarcus · Apr 19, 2007, 07:46 PM

My Lawyer Is Not Feeling I Have Any Hope Of Expecting More Than The First Offer.
My Space Is 800 Sq Ft. What's The Going Rent Nowadays? What Is The Dollar Per Sq Ft On A Build Out?

Getting Nervous...

Cvillecpm · Apr 20, 2007, 04:26 AM

You showed your hand when you purchased the new property rather than WAITING until you had a buy-out agreement for your old lease. Take the deal, they know they have you since you will be utilizing your new space soon anyway.

ScottGem · Apr 20, 2007, 05:35 AM

You didn't answer about what you have in writing. Also construction and rental costs vary so widely from area to area we really can't answer those questions. Also not having any ideas on what your existings offices look like and what the new ones will look like means we really can't make such estimates.

Its possible that the hospital feels you are really embellishing your new digs not reproducing the old one. So they are basing their offer on what it would take to reproduce. Since they are offering you free rent until the new offices are ready, then that doesn't enter into it.

If you feel you can't afford all the aspects of the build out, then scale it back. But I agree with your attorney. Probably the best deal you are going to get.

P.S. Please don't e-mail or PM followups. Just post them to the thread as you did here.