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Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,251,408 times
Reputation: 6469
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Hi folks,
My landlord (He owns half the town and founded this real estate company) just received a letter from Coldwell Banker announcing that the USPS is offering him a lease renewal on our local post office. They want 3% from him to renew the lease.
He had the building built in 1984 and has never paid a commission on any of the lease amounts. There is no other suitable building in town for a post office.
I offered him a couple of alternatives;
I produce an exclusive right to lease agreement, of which I collect the 3% and rebate it to him in it's entirety. CBRE can try to collect something from "their" client.
He tells the post office/CBRE that he's decided not to continue the lease and good luck finding a suitable space. I can just see the local outcry and the local congressman getting involved.
Commercial RE is totally different from residential. "Regulations" are a lot less restrictive.
In our area, it's not uncommon to ask the landlord to pay the/a commission and often the tenant will also be asked to pay commission. Rates can be as high as 10% (total), depending on the demand. Many landlords balk at paying, in which case the tenant obviously has to. The lowest commission I have seen (for small commercial rentals) is one month's commission.
Is it not already in their current lease about what happened upon lease renewal? Most leases spell out what the renewal fee is if there is one. Read it.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,251,408 times
Reputation: 6469
I survived the early 80's interest rates by doing commercial leasing and sales, I'm aware of the differences.
@Falcon, he's going to get his lease to me for examination. He's had quite a few 5 year extensions. I find it odd that all of a sudden CBRE sends him an "offer sheet" with a commission clause in it. Not a lease, an offer sheet.
My first thought is that he answers with a letter stating that the Lessee is an existing tenant that he procured and that no commission is offered for that tenant or any other.
I might also ask for evidence they have been retained by the USPS to represent them.
The USPS could hire any representative they want to, to find or renew lease space, at their dime.
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