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Purchasing a commercial building that I currently rent
Posted on 9/12/23 at 9:55 am
Posted on 9/12/23 at 9:55 am
Is it standard to pay out the remainder of the lease in addition to market value for the building? Mostly seems like nonsense to me, but I could see how someone could justify that ask....
10
Posted on 9/12/23 at 10:05 am to AUjim
No, typically the lease transfers to the new owner. Just bc that new owner is you, you shouldn’t he penalized. It’s all negotiations, if the person wasn’t trying to sell and you talked them into selling, then they may want both.
Posted on 9/12/23 at 10:11 am to AUjim
quote:
Is it standard to pay out the remainder of the lease in addition to market value for the building? Mostly seems like nonsense to me, but I could see how someone could justify that ask....
Before all the craziness, I know a guy rented a house and then convinced the owners to deduct all the rent he paid from the purchase price of the house. He got a steal.
Posted on 9/12/23 at 10:14 am to kengel2
Nope. He’s being greedy. Have never seen this in 25 yrs of CRE. Can’t have his cake and eat it too.
Posted on 9/12/23 at 11:14 am to AUjim
I agree that seems greedy. Never seen that.
Posted on 9/12/23 at 11:43 am to AUjim
quote:
Is it standard to pay out the remainder of the lease in addition to market value for the building?
Having been in real estate for nearly four decades now, I can say that this is anything but standard. It sounds more like a test of how badly do you, as the buyer, want to buy.
Posted on 9/12/23 at 12:37 pm to AUjim
quote:
Is it standard to pay out the remainder of the lease in addition to market value for the building?
No, and in fact, throw back at them you want to knock off all the rent you paid and put toward credit of the purchase. See how they respond to that.
Posted on 9/12/23 at 2:40 pm to AUjim
Absolutely not standard.
Posted on 9/12/23 at 3:33 pm to AUjim
Is it a single tenant of multi-tenant asset? Either way the guy is being super silly. You don’t get to sell and take the cash flow with you.
He’s just playing games because it’s a user deal
He’s just playing games because it’s a user deal
Posted on 9/12/23 at 4:59 pm to AUjim
quote:WTF?
Is it standard to pay out the remainder of the lease in addition to market value for the building?
He's offering to sell you the building, but you still have to pay him rent that would've been due from the sale date through the end of your lease? Thats ridiculous.
He sells it and gets off the hook for the cost of insurance, maintaining the property, property taxes, and interest on any loan he may have had on the property....but still gets to collect the rent for the rest of the lease? Sounds like a steal for him. Get a lump sum purchase price, get rid of all the expenses, but still keep the revenue until the lease expires.
This post was edited on 9/12/23 at 5:01 pm
Posted on 9/12/23 at 6:03 pm to AUjim
Absolutely fricking not. That's crazy. That would be like buying a commercial building you're not leasing the and current owner saying, but I get all the rent from the existing tenants through the remainder of their existing terms. You would never agree to that, right? What's the difference?
Posted on 9/12/23 at 6:18 pm to AUjim
He probably has no interest in selling unless you pay way above market.
I'd probably cut off negotiations if a seller came to me with that bullshite
I'd probably cut off negotiations if a seller came to me with that bullshite
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