Commercial Property Education

Hi guys,

I have a quick and basic question for you experienced commercial investors:

When looking at a lease with an option, say 3 years with a 2 x 3 year option, what does the option mean for the tenant? Is the tenant engaged in any way towards that additional 2 x 3 years period? Is it only a sign from the landlord that priority will be given to the existing tenant should they want to renew the lease?

Would appreciate your input on what the options really means in terms of commitment and basically wether having an option on the lease is a strong sign the tenant is likely to renew.

Thanks guys
Phiber
 
The tenant has the right but not the obligation to renew. Frequently there will be a rent review at renewal. As the landlord you can't depend on a renewal happening.
 
My experience is that they 90% of the time renew for the new period , i do usually ( or my agent) remind them of the window that they should let me know if they are going to take up the new term. A lot of the time tenants will miss this window, of course ok if you wanted to get them out.
 
Hi Guys,

Thanks for the feedback - that's good information.

While we're on the topic of education, do any of you guys know if data (sales history, vacancy rate of an area, time on market etc.) is accessible for commercial properties?
I usually go to RPdata or simply any magazine for the resi stuff and it's a good starting point.

Any of the like for CIP?

Cheers
 
My experience is that they 90% of the time renew for the new period , i do usually ( or my agent) remind them of the window that they should let me know if they are going to take up the new term. A lot of the time tenants will miss this window, of course ok if you wanted to get them out.
Assuming of course they are not breaching any lease conditions.

Commercial tenants in retail etc are normally seeking to exercise the option if their business is going well. They will want to get good use our of their fitout costs.
 
Hi Guys,

Thanks for the feedback - that's good information.

While we're on the topic of education, do any of you guys know if data (sales history, vacancy rate of an area, time on market etc.) is accessible for commercial properties?
I usually go to RPdata or simply any magazine for the resi stuff and it's a good starting point.

Any of the like for CIP?

Cheers
Pricefinder (and therefore I assume RPData) has sales history, land valuation etc. Not sure about vacancy rate and time on market.
 
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