Commercial Real Estate Group of Tucson, LLC

CHICAGO—(February 7, 2012)—ITRA Global, one of the largest real estate organizations devoted to the representation of corporate tenants and occupiers of commercial real estate worldwide, has announced the ITRA Global 2012 General Conference will be held March 30 through April 1 at the Fairmont Hotel in Pittsburgh.

Carrie S. Holstead, chairman of the board of directors for the organization and president of the Pittsburgh ITRA office explains, “This will be a great opportunity to introduce the managing principals from ITRA offices in major markets in North America, Latin America, Europe, and Asia to one of the most dynamic 21st Century markets in North America. The conference will also provide the perfect opportunity for our affiliate offices to learn more about what makes Pittsburgh a model city and region that continues to receive national acclaim.”

The ITRA Global event will be sponsored exclusively by the Pittsburgh Regional Alliance (PRA), an affiliate of the Allegheny Conference on Community Development. Dewitt Peart, President of the PRA, says the conference provides his marketing and economic development organization, recognized as one of the best in the United States, with a unique and highly desirable opportunity to interact with executives from around the globe who influence relocation and expansion decisions of their corporate clients.

“It is important to the Pittsburgh region’s continued economic growth that we establish and maintain relationships with site selectors in the U.S. and around the world so we can explain the many advantages of living and working in the Pittsburgh area,” Peart says. “Sponsoring this conference allows us to accomplish that and so much more.”

Gary Saulson, Director of Corporate Real Estate for Pittsburgh-based PNC Financial Services Group, Inc., will give a keynote presentation at the conference about “Achieving Value from an Environmental Commitment” and will discuss the company’s new headquarters, The Tower at PNC Plaza, which will be the “world’s greenest skyrise” when it opens in mid-2015.

“For more than a decade,” Saulson says, “PNC made the industry-leading commitment that all new construction and major renovations would follow LEED® green building standards. Due to this commitment, PNC recently celebrated the achievement of its 100th LEED certified building, which makes PNC the world leader in newly constructed LEED certified buildings. In total, PNC has 150 LEED-certified projects.”

ITRA Global is an organization of real estate professionals specializing in representing tenants and buyers in the leasing, acquisition and disposition of office, industrial and retail facilities. With coverage in over 80 major markets around the world, ITRA Global is one of the largest organizations dedicated to representing tenants and occupiers of commercial real estate. Clients benefit by having an experienced professional as their trusted advisor, providing conflict-free representation with total objectivity.

For more information about the conference, please contact Beth Wade, ITRA Global Executive Director, at 706.654.3201 or email bwade@itraglobal.com. To learn more about conflict-free representation and the worldwide representatives of ITRA Global, please visit www.itraglobal.com.

Tenant Representation

As Exclusive Tenant Representatives, we work on your side of the table in negotiations with landlords and building owners. We handle all types of transactions:

• leases
• dispositions
• acquisitions
• 1031 exchanges
• lease renewals

for all kinds of commercial real estate uses in Tucson and Southern Arizona, including

• retail space
• industrial space
• office space
• medical office
• research and development
• life sciences
• warehouse /distribution
• manufacturing
• headquarters.

Our comprehensive services include

Real Estate Market Analysis

• acquisitions
• dispositions
• lease renewals

Strategic Planning

• model development
• acquisition /consolidation analysis
• policies and procedures manuals
• space planning

Location Analysis

• labor market analysis
• transportation costs
• utility costs and availability
• quality of life
• taxation
• market accessibility

Financial Analysis

• buy vs. lease
• build-to-suit
• equity participation
• sale / leasebacks

Negotiations

• proposals
• lease contracts
• dispositions
• acquisition contracts

State and Local Incentives

• sale / leasebacks
• work letters
• operating expense and tax audits
• architectural engineering contracts
• developer agreements

State and Local Incentive Negotiations

• statutory and negotiated incentives
• cash grants
• infrastructure
• tax credits and abatements
• workforce grants and training
• subsidized land and building costs

Lease Management

• lease abstracting
• financial reports
• tax and operating expenses

Surplus Property Analysis

• marketability
• highest and best use
• disposition strategies

Project Management

• needs assessment
• project budget management
• selection and oversight of design team, contractors and vendors
• move coordination.

A well-written proposal opens the process of negotiating for a commercial real estate lease while covering major issues important to you.

After you’ve inspected several properties[link to touring properties] for your retail, office or industrial space, you’ll have a good idea of which ones you’d like to lease.

At this point, you’ll write a proposal to lease a specific commercial real estate property. This proposal is necessary whether you’re seeking a lease in Tucson or elsewhere. This step helps launch negotiations with the owner, landlord or their broker.

Actually, a well-written proposal to lease will get you well into lease negotiations. Once the proposal stage is complete, you will be provided a draft lease that you and your legal counsel will review and fine-tune into a contract that accurately defines your agreement.

First Steps

In preparing these letters of intent, I prefer to focus the proposal on working to gain agreement on the big issues first. Smaller issues should be set aside to work out later in the lease negotiations.

This strategy relieves much of the inherent tension in negotiating and makes agreement on the side issues easier to obtain.

If you have been provided with a floor plan of existing conditions, mark it up with your requirements and include it with your proposal.

Multiple Proposals

It’s appropriate to negotiate for more than one space in order to get the best lease possible. Creating competition, especially in a softer market, can work well in your favor. Letting other property owners know you have options can garner some nice concessions.

If you take this route, I advise you not to go much beyond the first round of proposal responses or into multiple space-planning sessions without informing all the property owners that you are entertaining several proposals.

Owner/Landlord Expectations

Security deposit. Expect to provide this unless you represent a major corporation with very high credit. Security is important to owners, especially when they provide a significant amount of tenant improvement dollars to secure a tenant.

First month’s rent. Owners expect this payment when the lease is executed, even if it is several months before the commencement date.

In most retail-space transactions, which commonly use net rents, the onus is on the tenant to make their own improvements or install fixtures. Therefore, it is customary to start the lease, but delay the start of the rent for a time to allow you to do this work.

An owner might be more willing to grant rent abatement if you propose one of two options:
half-rent for a longer time rather than free rent for a shorter period.
free rent amounts spread out over the term, which is often more palatable to owners.

Hazardous materials. It is important to discuss this front to avoid wasting everyone’s time. Include in your proposal any hazardous materials you will use in the space. Ask the owner for a complete written disclosure about prior uses of the premises.

You will want assurances that industrial space is clean before occupancy.

Operating costs. Tenants are required to pay for any increases in the cost of operating the building after the first year of the lease.

The first year of the lease is called the base year to which all future operating expense budgets are compared. Base years are most often calendar years, especially in multi-tenant properties.

If the space is within a multi-tenant property, you will need to define the owner’s obligations related to the common areas.

Space to Grow

Taking more space than you initially need is one way to deal with planned growth of your business. Most tenants are concerned about expansion rights so they can avoid moving if they outgrow the current space.

If you use this method, ensure you have the right to sublease a portion of the space.

Owners are reluctant to grant any options since options never serve the owner’s interests. Options to expand or renew are definitely considered concessions by property owners.

Ask for what you want, but expect the owner to try to water down your rights as much as possible. In tight markets, option concessions tend to dissipate.

If you are leasing more space than you need initially, ask to structure the rent one of two ways:
Start with a lower rent that gradually increases.
Calculate the first year’s rent only on the portion of the space you will use initially.

Tenant Improvements

If you are providing your own space planner, it’s possible to negotiate for the owner to pay for your architect. Typically this occurs when the owner already is offering space-planning services in order to attract tenants.

A reimbursement for tenant improvements that you initially pay for could cause a taxable event. Consult a tax advisor before agreeing to any cash allowance that comes as a reimbursement.
There are many more issues that should be included in a proposal to lease. Commercial Real Estate Group of Tucson can help you draw up a lease proposal that covers all the bases. Contact the tenant representation company to learn more.