What is the best way to evaluate a leased property's condition and maintenance history before renewing?

In my experience, India, with its vibrant business landscape and rapidly expanding economy, offers a flourishing market for commercial real estate. As the country continues to attract local and international investors, the commercial property sector has been witnessing significant growth and presenting an array of lucrative opportunities. India's commercial real estate market presents a promising landscape for investors and businesses alike. With rising demand, urbanization, foreign investments, technological advancements, and favorable government reforms, the sector is poised for continued growth. As the Indian economy expands and new business opportunities emerge, the commercial real estate market stands as a gateway to success to all.

In my experience, my candid thoughts about this is that when renewing a leased property, it’s important to thoroughly inspect its condition, review maintenance records, communicate openly with the landlord, consider professional inspections, and negotiate terms based on the property's overall upkeep and potential future maintenance needs.

At least 6 months prior to exercising a renewal options do the following: 1. review the maintenance and repair records and billings during prior term. 2. Review lease terms to determine tenant's maintenance and repair expense responsibilities. Often all or share of ordinary expenses. Capital expenses are (i) not reimbursable, (ii) reimbursable in full, or (iii) amortized over time (eg GAAP useful life). Figure out potential exposure. 3. Procure a property condition assessment from a third-party consultant. 4. Evaluate renewal term exposure. 5. Retain broker to assess alternate locations. 6. Renegotiate unfavorable provisions if possible. Landlords are more amenable in a soft "tenant" market. 7. Decide based upon results.

Before renewing a leased property, conduct a thorough evaluation of its condition and maintenance history. Begin by reviewing maintenance records, noting any recurring issues or major repairs. Inspect the property to identify current maintenance needs, such as HVAC systems, roofing, and common areas. Assess tenant feedback and complaints to gauge satisfaction and identify potential issues. Obtain professional inspections for structural integrity and safety compliance. Consider energy efficiency and sustainability upgrades. Evaluate compliance with local building codes. Analyzing these factors ensures informed decisions on lease renewals, promotes tenant satisfaction, and helps plan for necessary maintenance and improvements.

Having worked at a multinational company with a property management department, and now with my own boutique firm for the past 12 years, I will get asked about the track record of the property management firms in our market and what my experiences are in dealing with them. My take away as it pertains to the question, would be to ensure that the building the tenant is considering is being managed by a company with a recent and sound track record of property management in the same type of building (i.e. office, residential, industrial, etc) in which you are considering locating. Also if a building has changed property managers several times over the recent time horizon, that may also be a warning that the building is experiencing issues.

Conducting a property inspection before renegotiating a lease offers several advantages. It allows you to identify potential maintenance issues, assess the property's condition, negotiate repairs or improvements, and ensure you have accurate information for lease terms. This proactive approach can help in negotiating better lease terms, avoiding surprises, and establishing a clear understanding between the landlord and tenant.

Inspecting the property prior to lease renegotiation provides numerous benefits. This process enables you to pinpoint any possible maintenance concerns, evaluate the property's state, discuss necessary repairs or enhancements, and guarantee precise knowledge for lease terms. Taking this proactive stance can lead to more favorable lease terms, prevent unexpected issues, and establish a transparent understanding between the tenant and landlord.

It’s extremely cost effective to hire an independent third party firm to provide a thorough Property Condition Assessment to give you an overview of the property and estimate of repair costs. Use the results to plan annual maintenance and lease expenses.

I understand how important it is to check the health of roof, walls, floors, windows, doors, plumbing, electrical and lighting but what is more important is to check the strength and age of the civil structure i.e. beam and column. If the iron is still in good condition or not.

In my experience it would be best to hire a third party to do a property condition assessment. You can specify and areas that need to be assessed if not included in a base report. If there is concern for hazardous materials we would recommend a phase one report.

I'm of the opinion of operating with the same mindset with a lease renewal as if you were going to buy the property. Do not skip the Due Diligence process. Lease durations are typically a long commitment, know who you're jumping in bed with. Do your homework on the Landlord. Are they litigious? Are they tenant friendly or slumlords, etc.

When you invest in Real Estate always develop an inspection program. Make sure it is a Thorough Inspection and share it with the Tenant and have them to sign the report. Always have a program no mat

Conducting a pre-renegotiation property inspection yields a myriad of advantages. This approach empowers you to identify potential maintenance issues, thoroughly assess the property's condition, deliberate necessary repairs or enhancements, and ensure accurate comprehension of lease terms. Embracing this proactive strategy can result in securing more advantageous lease terms, preempting unforeseen complications, and fostering a transparent and amicable relationship between the tenant and landlord.

You can get a registered valuer to give you rent certicate. The valuer will compare to similar properties in the area so it makes it hard for the landlord to push rent above what other properties are going at.

It is nowadays even possible to use AI tools to research market rents for regions or buildings where not too much comparables are available. Checking with some tools might be helpful to improve the tenants negotiation position.

Negotiations take skill and patience. Know what you want, and what you don't want. Leave your emotions at home and never split the difference.

Remember what is important to the landlord. They may be much more willing to offer rent abatement rather than a rent reduction even though the net cost is the same to the tenant.

Leverage maintenance negotiations by presenting clear repair needs, suggesting fair cost-sharing, and emphasizing the positive impact on property value.

Negotiating with the landlord is essential to ensure you get a good deal. Landlords don't like vacant buildings. You might not always get the rent lower but you could other incentives such as a tidy up.

In recent times the tenant has huge opportunities to negotiate with the landlord. If a lower rent can not be agreed other incentives or grants for new work construction projects or improvements in sustainability or smart building infrastructure can be agreed.

By engaging in forward-thinking practices, property owners can gain valuable insights into the potential costs and benefits associated with staying in the current property or considering a move. This strategic planning allows for informed decision-making and minimizes the impact of unexpected events or situations that could adversely affect the property's condition. The mention of natural disasters, accidents, vandalism, and litigation as potential risks highlights the comprehensive nature of the proposed planning. It reinforces the need for a well-rounded contingency plan that addresses various potential threats, underscoring the importance of preparedness in the face of unforeseen challenges.

It takes a very strong reason and/or justification to relocate bearing in mind the fit out / renovation cost is a killer cost beside disruption cause to Business or Operation due to the move. Lifespan of "existing fixtures & fittings" should be taken into consideration too. Hence initial site selection is very crucial and tends to cover many aspects (e.g: rent in line with the quality / building grading, HSSE - Health, Safety, Security & Environment, maintenance, lease terms, building technology, external factors, etc) before shortlisting a site for long term occupation.

Bereits bei der Planung sollte das Facility Management mit dabei sein. Gerade im Bereich Corporate Real Estate gilt ?hnlich wie in der IT der Total Cost Of Ownership (TCO) Ansatz. Viele Dauerprobleme k?nnen durch das frühzeitige Beiziehen von Facility Management Experten verhindert werden. Die Architektur kann das meist nicht leisten. In der Gegenüberstellung von ?sthetik und Architektur zu TCO hei?t es n?mlich h?ufig: Function follows form - und nicht umgekehrt.

The overall experience during the lease tenure between Occupier and Landlord , issues such as repeated breakdowns, lack of transparency in CAM audits, broken promises around amenities and most importantly inconvenience caused to employees and loss of business will play an important role in renewal decision. For Landlords, receiving prompt payments over lease tenure and win-win on commercials around renewals will be important triggers

The best way for a tenant to evaluate a commercial property prior to renewing a lease is to review its maintenance and repair records to confirm all requests to landlord have been performed and all tenant’s obligations have been fulfilled; talk with employees about any needed maintenance and repairs that may not have been reported; and if the HVAC is Tenants responsibility, discuss the age and maintenance and repair schedule with your HVAC tech. If repairs, maintenance or a “freshening up” of the premises or shopping center is necessary, renewal is the time to discuss with landlord. Painting the building, fixing potholes, striping the parking lot, fixing the lighting or repairing the pylon sign can enhance the tenants renewal period.

Hire an engineer to conduct a structural assessmemt of the property and hold the Landlord liable for repairs with warranties, else penalties and/or cancellation in favour of the tenant with costs

Apply blockchain to store data and to enable interested parties to validate the data/work done/ agreements. If the data/permits/ownerships are placed on a blockchain network, transactions are done via token issuance, we can create a new way of managing real estate and conduct of due diligence.

Proper documentation with listed down and photo or video as proven track record. It serves as a agreed list for both parties based on existing conditions and relevant responsibilities.