HOW LANDLORDS CHEAT TENANTS WHEN MEASURING THEIR LEASED SPACE

When was the last time you measured your leased space before signing or even renewing your lease to make sure that the square footage is correct?  You probably never have.  The landlord usually tells you what the square footage is and you accept it without taking this important step as obvious as it seems.  You should always measure the usable square footage of your leased space before you sign or renew your lease.  Measuring the common areas of a building is not usually practical though as it’s more expensive, complicated and time consuming to do this.

As a tenant leasing space, you usually pay on rentable square footage (RSF) but only actually use what is inside your space.  This inside space is called usable square footage (USF).  The RSF usually contains something called a load for the common areas.  This load is your share of the common areas such as restrooms, corridors, stairways, etc.  Most loads in office buildings are between 15-20% of the USF and if they exceed this number the building can start to become pretty inefficient.  Retail and industrial users should not have a load at all or a small one at best unless for some reason they have substantial common areas which aren’t the norm for these types of buildings.

I can’t tell you how many times I have found that the landlord has unreasonably padded the square footage number especially for the tenant’s share of the common areas.  Items like roof overhangs, penthouses, elevator shafts, etc. have been included.  Once I discover the padded numbers, I am able to get a reduction from the landlord on either the square footage and/or rent.  Buildings are valued on square footage so the more square footage the higher the rent and the higher the value of the building.  This means that the landlords usually want to maximize the square footage anytime they can.

BOMA 2010 is the current architectural standard for measuring buildings that landlords like to use but it contains optional items that can be added to the common areas like roof overhangs that many times should not reasonably be added.

It is not always easy to figure out how a landlord has cheated or creatively measured their building and your space.  Landlords usually hate to disclose this information.  But you should always push the landlord for full disclosure on this issue and require them to send you their measurement calculations.  Even then, you need to have someone with experience in this matter review this information to verify that it has been done correctly.

Hiring a broker with experience in measuring buildings can help.  It always pays to have your own broker represent you; especially one that is knowledgeable in this area and in other areas related to landlord profit centers that most brokers aren’t aware of or simply don’t have experience with like operating expense reconciliations and invoices.  Hiring the right broker and taking the time to figure out whether your square footage is correct or not will usually be worth it and you will save money.

WESTLAKE PROMENADE RESTAURANT UPDATE FOR PREVIOUS MACARONI GRILL LOCATION

Here is latest update as of March 31, 2015:

The previous Macaroni Grill location at the Westlake Promenade at the corner of Thousand Oaks and Westlake Boulevards is being split into two different spaces.

One space will be smaller and for a nonfood tenant (Sophora, a cosmetic/hair retailer) and that lease has already been completed and construction is underway.

The remaining approximately 4,200 square foot is being marketed as a restaurant space but there is not pending deal for this space so it’s yet to be seen what it will become.

COMMERCIAL BROKER DUAL REPRESENTATION :  GOOD OR BAD IDEA?

Dual Representation is not legally allowed in many states.  Why?  Because it can’t be done without violating ethical issues as there are simply too many conflicts of interest.  The tenant/buyer loses big time and the owners and their brokers gain big time. This is why so many brokers and owners are in favor of it.

For 25 years I directed some very large real estate companies that owned millions of square feet of commercial property across the US and even internationally.  Many brokers wanted my business because I could give them 5 or 6 figure salaries off some of my properties in any one region that I controlled.  As a landlord, I loved it when my brokers were able to do dual representations because I had a great amount of leverage over the brokers who worked for me.  If they, or anyone in their firm representing a tenant/buyer, pushed too hard for a tenant/buyer at one of my properties –all I had to do was hint that they might not be able to keep my listings.  Would a broker risk losing a 5 or 6 figure salary working for me over one deal where they also represented the tenant/buyer?  Not likely.  That is all it took for the tenant/buyer to not get as good of a deal as they could have received had they used another broker from another firm; a firm that was not affiliated with a listing broker who worked for me or that wasn’t trying to get listings from me.  This is why dual representations shouldn’t be done.

Even though dual representations are legal in California, I won’t do them.  They should be outlawed.  Ask any good real estate attorney how it goes in court when they have to defend a broker for a dual representation. Attorneys that I have spoken with that have experience in this matter have said “it’s not a matter of whether they can win the case but rather of how much they can settle for”.  This is because these attorneys know that it is impossible for a broker to represent both parties correctly without fault.  Can you imagine an attorney who has represented a large property owner for decades attempting to also represent a tenant in a dispute in court?  It wouldn’t be possible to represent both parties fairly.  It doesn’t happen. This is the same reason why dual broker representation should not happen.

Every tenant/buyer should hire a broker that doesn’t have any conflict of interest with a landlord/seller or their broker.  The landlord/seller pays the tenant/buyer’s broker’s commission so it costs the tenant nothing.

Brokerage firms that specialize primarily in representing tenants/buyers are a very good choice because they don’t have the conflicts mentioned above.  If a tenant/buyer is thinking of representing themselves –that can potentially be even worse.  Hire an experienced broker who only has your interests in mind instead.  You will save a lot of time, money and headaches if you use the right broker.

Latest Conejo Valley Restaurant News

Here are some new updates as of February 19, 2015 related to new restaurant locations available in the Conejo Valley:

Famous Daves (BBQ) in Westlake Village has closed and the landlord has received multiple offers for lease this location.  It may remain as one large restaurant or become two or three.  Stay tuned for who the new tenant(s) will be.

Vitello’s Italian Restaurant in Westlake Village is on the market for lease.  Stay tuned for who the new tenant will be (DJM Commercial (me) has some interested clients so I hope it’s one of mine!).

Hunan Chinese Food in Westlake Village (3825 E. TO Blvd) is for sale so stayed tuned for a new tenant in this retail center (North Ranch Mall where Trader Joes is located).

Veggiemore (Kosher Israeli vegetarian and fish only) in the Agoura Hills City Mall at 5905 Kanan Road in the retail center where Agoura’s Famous Deli is located is for sale so stay tuned for who the new tenant is there.  DJM Commercial is representing Veggiemore.

Leila’s in Oak Park is for sale and the owner of Leila’s just opened a new restaurant in the Regency owned retail center where Sprouts and Gelsons  markets are in Westlake Village where Fins Seafood used to be.

A new Indian restaurant called Anarbagh (they have multiple locations) is opening around March, 2015 at 30853 Thousand Oaks Blvd in the North Ranch Gateway Center where China Garden currently occupies.  DJM Commercial represented the tenant here.

New Restaurants Coming Soon To Westlake Village, Agoura Hills And Oak Park!

Below is the latest list of new restaurants that are reportedly coming soon to Westlake Village, Agoura Hills and Oak Park:

New Agoura Hills Restaurants:

Padri located at 29002 Agoura Rd has an offer to purchase it and ,if the sale is completed, will remain with a similar use and probably the same name just new owners, remodel, and a changed up menu.

Isabellas located at 29020 Agoura Rd in the same retail center as Padri above will have a new owner/tenant and it’s yet to seen what type of restaurant it will become and when it will open. Owner is reported to be Russian and might bring something new and different but with a healthy bent.  Check back here for more updates soon regarding exact restaurant name, type of food and opening date.

New Oak Park Restaurant:

Cigale located at 702 Lindero Canyon Rd is going to be become a Mexican restaurant called Margarita Mexican Grill.  Check back here for more updates soon regarding when it is opening.

New Westlake Village Restaurant:

Urban Pizza is going to open its doors in the previous Qdoba space at the North Ranch Mall anchored by Trader Joes.  Check back here for more updates soon regarding when it is opening.

 

 

 

 

 

Outsource your commercial real estate department for free – and save money, time, and headaches

Frustrated by how much time and energy it takes to lease or buy commercial real estate (office, medical, dental, retail, industrial, etc.), whether you have to open up multiple locations across the US or even just one?

What to look for in commercial real estate deals

Although you’re great at what you do relating to your business, you’re probably not an expert at all the aspects of commercial real estate that affect your bottom line: Continue reading “Outsource your commercial real estate department for free – and save money, time, and headaches”

Commercial Leasing: Never do it on your own

You are a business owner with barely enough time in the day to run your company, much less worry about real estate. Someone on your staff reminds you that your lease will be expiring in a few months, so you start to think about what that will mean. Mostly, your current space works for you. You might need more or less space and the carpet and the paint might need replacing but it works. You are comfortable and moving is a hassle!

At the same time, you begin to notice all of the “Available Space” signs on your way to and from your office some in nice buildings. Continue reading “Commercial Leasing: Never do it on your own”

How to choose the right commercial broker/agent

Let’s face it – it is difficult to buy, sell, lease or manage commercial real estate properties without the help of an expert. Would you go to court without an attorney? Then why would you negotiate a lease without an expert representing you?

Hiring a good licensed commercial real estate agent is your best bet against losing thousands of dollars you will likely spend when you make costly mistakes, or miss out on solid commercial real estate investing opportunities.

That is why finding and hiring the right commercial real estate agent should be your first priority. Continue reading “How to choose the right commercial broker/agent”

Restaurant News for Agoura Hills and Westlake

Westlake Village: The Old Plug Nickel location (now a wine tasting bar called Cuvee Terrace) in WLV is being sold and leased to one of my clients that has a couple of very high end successful Italian restaurants in other cities.

The vacant space in the same center as Lure Seafood just past The Counter location has signed a lease for a New Zealand Pacific Rim type restaurant called Aroha that is one of my clients.  In the old 90210 Pho location in this center to the left of The Counter, a new restaurant called Kaze which somehow fuzes Japanese and Italian foods together signed a lease.

In Agoura Hills, Vincitori Italian (owns Spumoni in NP also and replaced China Star here)  just opened up recently in the Agoura Hills City Mall where the Agoura’s Famous Deli is and there will also be a new Kosher Israeli restaurant opening in the next couple of months just to the left of this Deli.  I am involved in both of these deals.

Padri’s will be opening up a high end Mexican restaurant in the Whizzins Center where Latigo Kid used to be in the next couple of months.  Latigo relocated to the old Alamo location in the Vons anchored center at Kanan and Thousand Oaks Blvd. in Agoura Hills.

Calabasas: The old Red Robins in Calabasas is being leased by the Agoura Famous Deli owner and it’s yet to been seen what it will become.

Westlake Village: The Gelsons/Sprouts/Vons center in WLV (all owned by one owner) is performing a 25-million dollar renovation and is going to not only remodel but also build new buildings in some of the parking areas as well as try to connect all 3 different plazas into one.  New restaurants/food uses coming here are:  Leilas (rumor only, not confirmed), Mendocino Farms, Pitfire Artisan Pizza, Le pain Quotidien, Pressed Juicery and Firefly.   And here is what the new plaza will look like with a list of current and new tenants:   http://s.lnimg.com/attachments/52094D72-3578-4790-A932-A1142E78AB9C.pdf.

Besides me representing Tifa Chocolate and Gelato for a potential second location at the new Target center in WLV called The Shoppes at Westlake, here is what else is going on at this center:

Target is under construction with a July 25, 2014, grand opening date and they own their land.  The goal is to get all other Tenants open on or around this date, with the exception of buildings B and E, which will be later phases delivered in September.

Here is a website link that will show you a site plan for each building so you can see where each tenant is going in this new center.

Building J – In N Out

Building G

  • Suite A:  Hook Burger
  • Suite B:  Negotiating with several food users
  • Suite C:  In Leases with a sit-down seafood restaurant
  • Suite D:  In Leases with a dessert tenant

Building F

  • Suite A:  In Leases with a sub sandwich tenant
  • Suite B:  Greens Up!
  • Suite C:  Olio E Limone Ristorante
  • Suite D:  Olio E Limone Pizzeria & Enoteca

Building C

  • Suite G:  Los Agaves
  • Suite F:  All Tressed Up (blow dry bar, also offers make-up application)
  • Suite E:  In Leases with a wireless tenant
  • Suite D:  Endless Beauty (high end beauty supply)
  • Suite B & C:  Salon suites tenant (haircut and color services)
  • Suite A:  BCBC Nail Salon

Building D

  • Suite A:  Negotiating with sushi concept
  • Suite B:  Negotiating with women’s apparel
  • Suite C:  Negotiating with a jewelry store
  • Suite D:  Negotiating with a home goods boutique
  • Suite E & F: In leases with a men’s clothing store and children’s concept, but may relocate both users to accommodate a microbrewery we are negotiating with
  • Suite G:  Jeannine’s Marketplace

Building B (this is a second phase of the project, which will be delivered in September)

  • Suite H: Tilly’s
  • Suites A, B and a portion of C: Medical Use

Building E (this is a second phase of the project, which will be delivered in September)

  • We have a lease out for signature with a 1,000 SF user, however.  Will have several food and retail tenants.