Tenant's today are living in uncertain times and for the most part the underlining culprit is "fear." Fear of the economic conditions of our day. Cutbacks are inescapable. Tenants are forced to re-position their business strategies to combat the economic negative curve. Property managers and landlords have to anticipate and expect change. The former methods and practices will simply not measure up to today standards.
To be successful in managing real estate property some adjustments are necessary to implement. Absentee landlords and inadequate management companies will not support the new conditions. Leases between landlord and tenants of yesteryears will not suffice. Additional language in conjunction with lease revisions will have to be adopted to ensure maximum landlord protection.
Tenants in recent days are not fulfilling their lease obligations and are breaking leases. Security deposits are not enough to compensate landlords. Tenants are playing musical chairs and are redefining the industry. Tenant's down-sizing their leased office requirements is a reality that cannot be denied. Relocating tenants in building or perhaps relinquishing a portion of tenant's suite in building is a key remedy in preserving cash flow and minimizing losses.
Property managers have to adjust their thinking and work with struggling tenants. Sub-leasing in the industry is gaining momentum and is inevitable. Property managers today cannot afford not to be familiar their tenants' operations. Knowing your tenants and being somewhat familiar with employees' and staff members will safeguard the landlord from unauthorized subleases. Stringent leases are a must with a strong sublease clause written into lease with strict enforceable collectable penalties.
Some tenants will try to outsmart the landlords in subleasing a portion of their leased premises to generate more income. Property managers and landlords have to be diligent in inspecting each tenancy, ensuring that tenants are upholding their lease agreements.
In the event, an unauthorized sublease occurs, enforceable maximum penalties should be implemented to remedy the illegal occurrence. Usually, strict enforceable lease clauses will be a deterrent from tenants attempting to circumvent landlord's terms and conditions of their lease agreements.
"We encourage all of our customers to work closely with the landlords and management companies alike, and having a good relationship will go a long way. I have closed 87 leases this year and tenants' relocating is a reality that is not going away anytime soon," said Michael Zere, vice president at Zere Real Estate Services.
The key factor and objective to any building is obviously to have no or a relatively low occupancy. A simple fact is that pro-active property managers shall preserve and safeguard investment properties. Your essential stance you take during this hour will be beneficial and one cannot afford to take an inactive participate role. What a qualified property manager implements today will minimize your losses for tomorrow and ultimately protect your investment for the long-term.

Patrick Caroleo is the president and CEO, The Dove Organization, Ltd, Ronkonkoma, N.Y. Tags: