« Office Suites, A Sweet Alternative | Main | Operating Expense Escalations Explained »


Feed You can follow this conversation by subscribing to the comment feed for this post.

Mark Beaudry, SIOR

Lots of ways to skin the "cat" of security. With some weaker credit tenants, we've negotiated more than "normal" cash security deposits, with a provision that at the end of the first (or any other)year[s]) so long as the tenant has proven to be a reliable payor, he gets a month's rent "credit" (or however many are agreed to) in return of his deposit, reducing the total until you get to the required "minimum", which in my experience, has typically been 2 months for the duration of the term, for a non-credit tenant. I have dealt with some landlords who don't care if you're the pope and want cash security from the largest of credit companies. I've solved that problem by convincing the tenant to put up pre-paid rent in lieu of "security", to be credited to the last month or two of the lease. I have found that most non-credit tenants (or their lawyers) do not want to give a personal guarantee for 100% of the lease (defeats the whole purpose of forming a corporation or LLC to limit one's personal exposure), but will agree to some limited amount of rent, like six-months, or one-year of a 3 or 5-year lease, or an amount equal to the fit out cost. I have not yet lost a deal for lack of finding a way to make a landlord feel all warm and fuzzy via security of some sort.
Beaudry Commercial has been serving the needs of business and industry in southwestern Fairfield County, Connecticut, since 1936.

The comments to this entry are closed.

My Photo
RM Bradley
Blog powered by Typepad

Twitter Updates

    follow me on Twitter