Commercial Lease Negotiation Tips

REAL ESTATE
Three Tips for Tenants When Negotiating a Commercial Lease
Is it time to consider leasing space? Businesses grow and evolve, and often business changes such as these will result in the need for more space or a relocation to a different area. Potential tenants need to be aware of what to look for when they’re negotiating the terms of their lease agreement. Here are three key areas to consider before you sign a commercial lease:

Know the needs of your business: Every business is unique, and it’s vital that you understand what your business needs to succeed. Does the property fit the type of client that drives your business? Does the location meet your logistic and inventory needs? These factors need to be closely considered before entering into a long-term lease.

Understand the terminology: Lease agreements are legal documents containing terminology not typically used in regular conversation. Strengthen your negotiating power and acquire a solid understanding of terms used in the lease agreement, such as triple net lease, gross lease, modified gross lease, incidental expenses, common area maintenance, and tenant inducements. All will impact the costs associated with your lease.

Review termination and renewal conditions: Ensure you understand your responsibilities upon renewing or terminating your commercial lease. Renewal options should be negotiated prior to signing and be included in your lease agreement. When you terminate, the space is usually renovated to some degree; ensure the agreement clearly indicates which party is responsible for the associated costs.

Negotiating a lease is one of the most important steps in growing your business. Be prepared!


ENTREPRENEURS
The Face of the Future: Boomer Start-Ups

Prediction: Boomers will still make waves in 2018.

After years of working for others, these educated, experienced individuals are making the decisions – and taking the risks – to start their own businesses in retirement, impacting society for years to come.

Notes writer Wendy Mayhew in the Globe and Mail: “Many people can’t wait to retire. They want to golf, travel, or just take it easy. Others can’t wait to retire so they can start the business they have always dreamed about.”

Boomers are doing what they love and doing it well.

According to the 2017 Kauffman Index of Entrepreneurship, individuals between 55 and 64 accounted for 25.5% of all new entrepreneurs in 2016, while the number of 20- to 34-year-old entrepreneurs declined by 34.3% over a 20-year period to 24.4% in 2016.

Why? It may be that the boomer generation is healthier and more energetic than previous generations, it may be that boomers (who are notoriously bad savers) need to supplement their income in retirement, or it may simply be that older workers have a lot to offer.

In a recent CNBC article, Jody Holtzman, senior vice president of market innovation for AARP, suggests: “[As a boomer] you know what works and what doesn’t, you’ve been in small and big companies … You have a network, possibly savings, or other ways to gain access to capital. All of those things come together as key success factors for building and sustaining a business.”

Plus, boomers have always wanted to change the world. And now’s their chance.


HOT BIZ TRENDS
The Face of the Future: Experiential Marketing

A new approach to shopping is coming our way in 2018, and it’s one that every business, no matter the industry, should be aware of.

It’s all about the “experience.” And while the charge is led by branded clothing and accessory retailers, it paints a picture of significant change to every company’s interface with customers.

As the department store and the mall die off, corporations are experimenting with branded environments that function as marketing tools as well as retail outlets.

For decades, shopping – in malls, big-box showrooms, and tiny specialty boutiques – has been a cultural pastime. But the way people shop has changed dramatically as consumers become more digitally engrossed.

Interestingly, as noted in a recent article in CityLab, this may not be a good thing: “The current conventional wisdom on retail holds that digital sales cannot reach far enough on their own to build sustainable customer bases, so digital-first brands have migrated toward physical stores, pop-up shops, and other experiential marketing strategies.”

Now, it’s not just about buying a product, it’s about experiencing it. From malls that once engaged customers just by presenting a cornucopia of brands, the experiential environments now engage shoppers in ways designed to promote a brand’s online presence. Now, brick-and-mortar spaces serve as flexible settings or backdrops for retail “experiences” and incorporate advertising, design, events, multisensory input, social media, and more to woo and wow customers.

Clothing and accessory brands such as Warby Parker, Bonobos, and Everlane – known as digital-first retailers – have been out front in designing “experiential spaces” to connect offline with customers.

But others will follow. The experiential approach is resonating with the customer – who, as we know, is always right.


REAL ESTATE
About the Environmental Assessment Process
Ethical environmental practices such as green energy efforts and the proper handling of chemicals and contaminants has led to an increased awareness of the inadequacy of past practices and the potential for detrimental health impacts on the surrounding population. As a result, commercial property owners have become more aware of the need for inspections and due diligence to comply with current federal, state, and local environmental regulations.

Currently, there is no standard legal requirement for an environmental site assessment in North America. However, an assessment may be required in order to obtain financing. Although it may not be required, it’s important for investors to ensure the property they’re purchasing is not hiding any contamination, which may impact the value of the property if contamination is eventually found. Having an understanding of the inspection phases and processes can demystify the process.

Background: Although it’s not limited to these activities, sites of industries that have conducted or are conducting the following activities may require an environmental assessment: extraction, processing, transporting, or distributing oil or petroleum products; manufacturing chemical, plastic, and rubber products; and processing food or animal by-products. The presence of hazardous products storage facilities should trigger an assessment as well.

Phase 1: During the initial assessment phase, a consultant will review information to ensure compliance with environmental regulations. This may include staff interviews, record reviews, facility tours, site photographs, and documents of the subject and adjacent properties.

The consultant may also review specific site areas more closely. There can be inspections of operational log books and equipment maintenance logs, as well as pollution control equipment and wastewater discharge logs. Environmental reports will be reviewed in detail focusing on the impact business operations may have had on the air, water, and soil at the property site. Operations near the subject property may also have an impact due to leaching of groundwater.

Note that property owners may want to use self-assessment tools to avoid any surprises during the inspection process.

After the initial inspection is completed, the consultant will meet with the property owner to review his or her findings and to request any additional information that may be required to make a detailed assessment.

Phase 2: This phase is focused on gathering more specific information resulting from the initial assessment. Phase 2 assessments are often done when there is suspected contamination – historical or otherwise – that could have had a significant impact on the soil, air, or water quality at the site or surrounding properties.

In this phase, laboratory testing is often done on samples to determine the level of contamination; on-site drilling may be undertaken to examine water and soil for sources of contamination, and samples may be taken from storage tanks for additional testing. This process provides a detailed understanding of the condition of the water, soil, and air quality at the site.

Phase 3: The resulting report from the consultant, which is the key part of the process, outlines the best alternatives to address environmental contamination, including costs and strategies.

SA Realty Watch Group
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Worth Reading
6 Ways to Survive Retirement Income Shocks
By John Wasik
Forbes

As much as you’d like a smooth road to retirement, there’s no way to avoid the unpredictable bumps that happen along the way. “Income shocks” – like suddenly losing your job – can come at any time. And while you can’t predict these setbacks, you can survive the blows. Find out how to get yourself back on track.

Work and the Loneliness Epidemic
By Vivek Murthy

Harvard Business Review

Despite living in the most technologically connected era in history, more people are lonely. In the workplace, employees (and some 50% of CEOs) say they feel lonely in their jobs. Many now work from home, but even office workers still spend the majority of work time in front of a computer screen. Loneliness, which Murthy describes as a feeling of not being connected socially, isn’t just a health problem; it saps productivity at work. We social animals need to connect in real time. Here’s how.

How to Retire at 40
By Ben Steverman

Bloomberg Businessweek

Think it’s impossible to retire by the age of 40? Three people who retired in their 30s and 40s can tell you all about how they made the seemingly impossible possible. What do the three have in common? Discipline. They all live on 3% to 4% of their investment portfolio annually. Easier said than done? Not for these individuals. Or maybe for you.


LINKS YOU CAN USE
2018 Marketing Trends
In a dynamic marketplace, it can be difficult to keep up with current marketing trends. Maintain a solid marketing presence in 2018 with these links:

Content marketing is shifting from product-centered to audience-centered. Discover what trends to watch for this year:
Content Marketing Trends to Watch for 2018

What works best in digital marketing today? Here are the top 10 digital marketing trends for 2018:
10 Marketing Trends to act on in 2018

What about social media? Where and how does that fit in? Get the scoop here:
3 Social Media Marketing Trends to Watch in 2018

Many businesses must enhance their marketing approaches to survive. Transform your methods with these trends:
Top 10 Trends For Digital Transformation In 2018

From chatbots to geofencing, you won’t want to miss out on these innovative marketing strategies
10 Marketing Trends to Think About for 2018

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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