Make CRE Lease Negotiations Less Daunting

How to Make CRE Lease Negotiations Less Daunting
Whether you’re a prospective tenant or a commercial building owner, negotiating a commercial lease can be daunting. Commercial lease documents can be lengthy, complex, and incredibly detail-oriented. A misinterpretation could put your business at risk.

Here are some points to consider before opening a lease negotiation:

Hidden costs: It’s important that parties are aware of all the costs associated with the lease agreement. It’s easy to focus on the monthly lease rate; but to get the full picture, consider other fees that may be included in the lease agreement. Commercial, retail, and office spaces may have common, maintenance, utilities, janitorial staff, and/or other fees as well as the base rental fee.

Who is responsible for building upgrades? Many commercial lease agreements contain provisions for changes to the leased premises. This could include extensive alterations for accessibility or to meet other building standards, or it could be cosmetic alterations to the overall look and feel of the space. Both landlord and tenant must know who is responsible for the cost of those upgrades, and both should also be aware of any condition requirements that would take effect when the lease is terminated; for example, does the space have to be returned to its original state?

Understanding term and renewal options: Commercial leases vary in duration and use both short- and long-term lease terms. It’s crucial that everyone is aware of the full term of the lease and what notifications are required to renew or terminate the agreement.

Finally: And most importantly – don’t sign anything without legal advice.

Predictive Analytics: This Century’s Crystal Ball

It’s getting easier for small and medium-size enterprises (SMEs) to use predictive analytics (PA) to make informed decisions in areas such as marketing, sales, supply chain optimization, and more. Increasingly, organizations of all sizes are using sophisticated statistical approaches to forecast future trends and behaviors from historical data. It helps to have a crystal ball these days.

While use patterns have long been employed to forecast future demand, technology has made data analytics faster, less costly, and more accessible. As a result, many smaller businesses are now using it to identify growth areas and to market certain products or services to easily identifiable target groups via special offers or other tightly focused approaches.

PA models can help retailers fine-tune consumer messaging; in sales, it can put you ahead of the pack. Real estate agents, for example, can focus marketing dollars on targeting individuals most likely to be interested in certain listings, as well as price forecasting for a specific property. Agents also can pinpoint homeowners who are most likely to sell their homes – and therefore might welcome an approach. It’s a long way from a cold call.

That said, PA is most valuable when predicting group behavior. It’s not so much about the individual customer as it is about identifying behavior patterns of an entire customer segment and using that information to inform business strategy. For instance, if historical data indicates a customer segment is highly likely to move to a competitor, you can respond with a special retention offer. Quickly, directly, easily. And very likely successfully!

Local Social Media Gurus Can Influence Your Customers

Word of mouth has been the best way to market almost since the beginning of time. Until recently, when it came to large purchases such as cars or homes, we’d ask family and friends for their advice. And they’d influence our buying decisions.

But in today’s digital age, there are new advisors. They’re called influencers, and they’re primarily celebrities who use social media platforms to encourage their followers to act, style, eat, and buy as they do.

Social media influencers have followers that often number in the millions. In June 2017, for example, singer Selena Gomez had 123 million followers on Instagram alone. And they’re incredibly powerful. As Kimberly de Silva points out in a recent Entrepreneur article, 49% of buyers rely on social media influencers for advice.

Now, says de Silva, small- and medium-size enterprises (SMEs) have the opportunity to use this desirable approach, thanks to micro-influencer marketing. As she suggests: “[An SME can now] partner with influencers with smaller followings to promote your local business with authentic posts of sponsored ads.”

Although micro-influencers reach smaller numbers, their fans are more tuned in and more apt to listen. What’s more, micro-influencers appear to be more influential in local markets. They become the trusted advisors, the voice of authority in a given area or community – precisely what small businesses need.

It can take some serious research to find the right micro-influencers; the ideal candidate is an individual who precisely aligns with your brand and message. Plus you’ll want to partner with those who already share interests with your target audience on platforms they both use.

De Silva notes: “The better the fit, the more effective the influencer marketing campaign.”

Tips for Investing in Medical Office Space
Medical practitioners are not the only ones who can capitalize on the growing real estate investment sector of medical office space.

Office space of all kinds goes through periods of ups and downs, but medical office space tends to be a more resilient real estate investment, as our need for care throughout the course of our lives is a relative constant.

Is an investment in medical office space right for your commercial real estate portfolio? The following may help clarify the issue for you:

Location: Of course, any real estate investment is always about location; an investment in medical office space, like other CRE investments, hinges on the right location to maximize potential for growth and profit.

It’s important to conduct comprehensive market research before moving forward. Check to see whether there’s a significant saturation of medical office space in the area you’re considering. Are existing practitioners too busy and therefore willing to embrace new practitioners? Are there complementary practices and facilities adjacent to the office space you’re considering?

Demographics: This is more important to medical professionals than you may think. Certain types of practices prefer to serve a specific segment of the population. As well, population growth or decline will play into the long-term success of your facility and the practitioners who lease space there.

Professional Amenities: Access to professional amenities is an important feature when attracting medical specialist tenants. With the importance of patient privacy and the added security needs of many medical professionals, secure filing and mailrooms inside the building would be an asset.

Additional amenities include secure storage and locker facilities, as well as proximity to auxiliary services such as patient transfer, medical imaging, and medical laboratory services.

Site Amenities: Desirable properties are clean and modern with access to attractive common areas. HVAC, electrical, and LAN systems should consistently handle the heavy loads required to keep the equipment and computerized systems up and running. These essentials will not only attract but retain high-quality tenants.

A frequently overlooked site amenity is adequate parking for staff and patients. Careful consideration should be given to ensuring that there are sufficient accessible parking spaces to accommodate patient needs, as well as the needs of mobility transportation services vehicles that will be providing pick-up and drop-off services for patients.

Hospital Proximity: This is a serious consideration for medical professionals. It’s an issue of convenient access for the professionals who work in the medical center and may be on staff or have guest privileges at the hospital.

Accessibility: Federal and/or state legislation sets out what is required in all buildings in order to ensure accessibility for people with disabilities. Be aware of all applicable regulations before you invest.

If you’re considering investing in medical office space, you’ll want to do your research, but just as important is the advice of a good commercial real estate agent who is familiar with the location you’re considering. Your agent can clarify local bylaws and future zoning plans. Don’t sign on without him or her.

SA Realty Watch Group
facebook Twitter Linked In
How to Win Big in Today’s Economy
The altered economic landscape presents innovative and nimble businesses with opportunities to thrive.
Find out how by requesting my free report “How to Win Big in Today’s Economy” by replying to this email.”
Just reply to this email and I’ll send it right out to you.

Quick Quiz
Each month I’ll give you a new question.

Just reply to this email for the answer.

What colors other than black and white do dogs see?

Worth Reading
5 Takeaways from a Great Book on Accomplishing More by Doing Less
By Vanessa Van Edwards

The secret to achieving extraordinary levels of success is narrowing in on one visionary goal that will influence every decision you make. Home in on that “one thing,” live intentionally, don’t mistake busyness with productivity, and chase “big specific goals” with long-term impacts on that all-important objective.

How Economics Became a Religion
By John Rapley

Is economics the new religion? Certainly our lives have become dictated by it, and many of us put our faith in “material abundance.” But as history has shown, nothing lasts forever – just consider the 2008 crash. John Rapley takes a critical look at the fallibility of human economists who maintain a false sense of conviction in a highly unpredictable world.

How Successful Leaders Think and Work
By Verl Workman

In order to be an effective, successful leader, you need to have people who will follow you. And to do that, you may want to change how you think and work. A great leader is someone who shares his or her vision using open and honest communication. Note: This useful piece isn’t just for those in real estate; it’s for leaders-to-be in every field.

Marketing Trends
What marketing methods will keep your small- or medium-size enterprise (SME) at the forefront of your industry? Which tactics are a waste of resources? The following links shed light on the latest trends in tech and analytics to help you make the most of your marketing efforts:

Should you focus on Facebook, Instagram, or LinkedIn? Discover the most important insights from the 2017 SME social media report:
4 Insights from the SME 2017 Social Media Marketing Report

In today’s digital marketplace, you can’t afford to miss out on “the mobile moment.” Try these five techniques to make the most of smart technology:
5 Mobile Marketing Practices Every Profit-Minded Business Should Adopt

Need something to keep it all straight? Here’s your checklist:
Checklist of Essential Small Business Technology in 2017

From collaboration tools to crowdfunding to videos, these top 10 trends will drive your business toward success:
Top 10 Business Trends That Will Drive Success In 2017

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.
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –