SOME THINGS TO THINK ABOUT REGARDING THE RECENTLY PASSED COMMERCIAL REAL ESTATE AGENCY DISCLOSURE BILL (SB 1171)

Last month GlobeSt.com, a national real estate website, published an article by Carrie Rossenfeld discussing a recently passed California Bill regarding agency disclosure requirements for commercial real estate transactions. The premise of SB 1171 is as follows, “Effective January 1, 2015, commercial real estate salespersons and brokers will need to provide, in writing, their exact proposed agency role in the future transaction. In addition, this disclosure will need to be signed by the potential client prior to moving forward with any representation.”

How will this affect you as a tenant leasing space? Let’s answer that question using an hypothetical example. You’re current lease is a about to expire and you will probably stay at your current location, but you want to see what else might be available. What seems like the path of least resistance is to contact the agent whose name is all over your building, on a sign out front, on the lobby directory and maybe even in the elevator. That individual might have even contacted you recently to say your lease is expiring soon. This person is the listing agent who is hired by the owner of your building to market space and find tenants for their client (the building owner).

The new law will require that individual to state in writing their agency relationship with the landlord. They represent the landlord’s interests which is to get you to renew your lease at their building in order to maintain or increase occupancy. Let’s take the example a little further, say the listing agent is good and represents two more buildings in the area. Their contractual obligation is to find tenants for their landlord clients. In any of these scenarios it will be disclosed the agent’s relationship and fiduciary responsibility is to the landlord(s). As such it is difficult to imagine a situation where you as a tenant should feel comfortable that your best interests are the priority of that particular agent. Continue reading

PERIODIC REVIEW OF YOUR LEASE IS A PRUDENT MOVE

Thankfully the fires from a few weeks ago are out but I fear it’s going to be a long fire season. Take a look at the accompanying picture I took of a building along Palomar Airport Road in Carlsbad damaged by the fire. Clients in that area who witnessed the fire commented on how awe inspiring and destructive the power of nature can be.052014 Carlsbad wildfire damageWhy am I showing you a fire damaged building? Events of this type should make us pause and reflect on how prepared our businesses are to handle catastrophes. As it relates to your commercial lease it’s a good idea to periodically review the document for two reasons; one, make sure you have the appropriate level of insurance protection, and two, compare your situation to the current market conditions to see if there are areas to potentially reduce occupancy costs.

At Botticelli Realty Advisors we provide lease review services whether you are an existing client or not, and it is free of charge. This is a good idea to do if you’re more than half way through a long term lease, and definitely after an event like the recent fires.

How many of you remember the insurance clause in your lease stating the type of coverage you need to carry during the term? Usually right after the insurance clause is the section addressing damage or destruction of the property. This clause describes what happens in the event of destruction of premises by fire (or other cause) and details what happens to the lease if a certain percentage of the premises has been destroyed or is not habitable. Continue reading

SportRX is one of Botticelli Realty Advisors’ most recent clients

Friends,

I would like to introduce Dan Bruton, the President of SportRX, one our most  recent clients.  I worked with Dan to help them find new, updated space for their sales and marketing offices here in San Diego.  SportRX is the leader in sports prescription eye wear.  They will take any prescription and specially manufacture the lenses in their Los Angeles facility.  The lenses can be for any type and brand of eye wear; and I mean any…from everyday glasses, to cycling or golf sunglasses, scuba diving masks, motorcycle goggles, just to name a few.

Dan was kind enough to say a few words about the work we did for SportRX, and I invite you to watch the video.  Dan knows exactly where he wants to take his company and I’m glad Botticelli Realty Advisors was able to play a part in realizing that vision.

Thank you,

Brian Lukacz