Specializing in bringing together all components necessary for long term business growth,
profitability and success; and ensuring
that they are working in harmony.

Why Won’t the Landlord Reduce My Commercial Space Rent?

August 14th, 2015

We asked Steve Gillespie from Austin Tenant Advisors to share one of his company blogs. With today’s hot leasing market and the hard to keep up availability of commercial space, we felt the following to be extremely helpful:

When you see a commercial real estate space (retail, warehouse, or office space) sit empty for months you would assume that the landlord would reduce the rent to get it leased out ASAP. If the space was located in a down market you might have a pretty good chance of getting a sweet deal. However if the space is located in a “HOT” market then you have a much less chance of that happening.

What are some reasons why a landlord will not reduce commercial real estate rents?
Some are just stubborn and not willing to negotiate
Some have a mortgage on the property and the lender will not allow them to do so
Maybe the commercial property was just sold and the new owner has enough cash to float it until the right deal comes along
Maybe the property is in foreclosure and the bank is still holding the title
If they reduce the rents it may lower the value of the property
Many commercial real estate properties have more than one tenant. Even though one space has been vacant for a long time the property has enough rent coming in from the other tenants for the owner to make money. Because of that owners are willing to wait for a tenant who wants to pay their rates
Owners don’t want to have to hear from existing tenants who find out that their neighbor’s rent is half the cost of theirs.
Steven P. Gillespie | TX and IL Licensure
Can be reached  by calling Austin Tenant Advisors:
O: 512.779.4961
M: 630.379.3033
steve@austintenantadvisors.com
www.AustinTenantAdvisors.com

A Matter of Perception

June 29th, 2015

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When driving through downtown I noticed a large sign that read “efficiency apartments here.”
Next the radio ad begins blurting out the great value of “pr-owned” vehicles. Continuing through the neighborhood I noticed the sign in front of the upscale home that read, “For lease.”

With all of this is a common thread about how a small name change for the same thing creates a different image.

Efficiency apartments use to be called Studio’s. But that alluded to perhaps more to – needing to be on a starving student on a budget instead of upscale, hipster and cool.
In zeroing into the increased value perception of apartments for rent, and the practical reason for charging tenants perhaps 30 – 50% more, apartment complexes began posting signs that say, “luxury apartments homes for lease!” Sounds more inviting – and no doubt more expensive doesn’t it?

Pr-owned originally meant “used”, but that alluded to old, dirty, stinky – and for the poor folks. So the term went to Pr-owned – representing a smart purchase by the “Millionaire next Door.” Sounds much more sophisticated doesn’t it? Finally, for lease, like pr-owned is simply a warmed over and updated version of “for rent.” Oh but the words leasing and pr-owned creates a more positive spin doesn’t it?

Words create a picture which motivates and prepares the buyer for whatever is being sold. It is a powerful way to enhance your advertising – but be sure that whoever is putting together your campaign truly understands the image the word is intended to create.

5 Tips For Negotiating An Office Lease

June 29th, 2015

arm-wrestle-300x200Whether you are a new business or an established company it is important that you keep in mind important rules for negotiating space. Not knowing all of the potential pitfalls or failing to have a competent advocate representing you can make or break your ability to turn a profit and grow. We want our clients to be successful and expand.

This is why we asked Steven Gillespie with Austin Tenant Advisors to share these important insights.
Here are 5 tips to help you:
1) Know Your Time-frame And Start The Process Early
When it comes to leasing office space, time is your best friend. Many companies don’t realize that they need extra space or that their lease is expiring soon until it is too late. The typical office leasing transaction can take 6-12 months, so planning ahead and allowing ample time is extremely important.
2) Have Realistic Size And Budget Requirements
All too often, companies will find their ideal office space only to later realize that they can’t afford it. Along with paying base rent, you must account for your proportionate share of taxes, operating expenses, utilities, and insurance. As your company grows, you will likely need more square feet to accommodate a larger team. If you have rapid growth plans, it is in your best interest to not get locked into a long-term lease as being stuck with too small of a space can eventually become a liability.
3) Create Leverage Between Landlords
Whether renewing an existing office lease or seeking out a new office space for rent, it is important to have multiple office options to consider. Even if you are 99.9% sure that you are going to renew your lease, it is best to make the appearance to your landlord that you are ready, willing, and able to walk away in order to get the best deal.
4) Make Even Comparisons
Leases can be structured in many different ways and it is important to know you are making an equal comparison when looking at the pricing of multiple office options. Many buildings are quoted in gross lease rates, others are in net, and some have utilities included. Be sure you know all of the expenses associated with leasing an office space before making your final decision.
5) Use A Tenant Representative To Save Time And Money
A quality Tenant Representative will only represent tenants, never landlords, to avoid conflict of interest. Their entire firm will also reflect this and being a Tenant Representative will be their full time job. Unless you are a commercial real estate professional, it would not be in your best interest to try to negotiate directly with the landlord as you will likely be leaving money on the table. Using a Tenant Representative will free up your time as they will conduct all the necessary legwork associated with an office lease transaction. This will allow you to continue to successfully run your business and avoid costly mistakes during the lease negotiations.
For additional information, contact Steven directly at:
steve@austintenantadvisors.com or call him directly at:
512-779-4961

Converting your local Starbucks into a Call Center (Those annoying phone-yappers!)

April 20th, 2015

most-annoying-iphoneHow many times have you had to experience some moron who converts your favorite coffee shop into call center? It is obvious that whoever they represent did not teach their people anything about social etiquette. Companies who fail to do this may increase a sale or two with whoever is being notified, but are losing a public relations campaign in the process.

When I stop by a Starbucks or a local competitor of Starbucks it is generally for a chance to regroup and check in on email. On occasion, I may do a little bit of work or even blogging. But if and when I do have a phone call to make I will always take it outside. Obviously, beyond simple courtesy, it isn’t professional of me to discuss a client’s business over the phone where others can listen. Furthermore, the recipient of my call deserves to hear me with as much clarity (lack of background noise as possible)

Several years ago, a great book entitled Social Intelligence addressed the growing lack of common sense of some in our society. Phone-yapping in your local Starbucks is another example. If you have a sales team, be sure to train them not turn coffee houses, cafes or restaurants into local call centers. As the old adage goes, there is a time and a place for everything.

ARE YOU SERIOUS!? What’s the matter with this sign?

February 23rd, 2015

It looks like a Domino’s franchise near the UT campus has gone rogue. In their desperation to attract drivers, they have exposed themselves and their franchiser to massive liability and a public relations nightmare.

Consider this:
A high-school or college kid takes the job. Believing that he can make more money by driving fast until in a reckless tragedy, hits a pedestrian (someone else’s son or daughter) and kills them.

So what happens next?
The pedestrian’s family files and no doubt wins a multi-million dollar lawsuit against Domino’s.
The irresponsibly inspired delivery driver’s life is ruined and goes first to jail – and later, to be haunted with killing someone by accident simply to earn a few extra bucks.

On top of the lawsuit, Domino’s experiences a public relations nightmare.
ALL BECAUSE OF ONE STUPID SIGN!
Next time you advertise for new employees, remember that “what you advertise, could reap what you sow.” Be responsible.

The Obituary Assignment

December 31st, 2014

Several months ago I received an email from a U.T Business student who asked to meet with some thoughts regarding the “key to success.” This was part of an assignment and knowing that I had advised CEOs and senior business people through-out multiple sectors, knew that we would have a productive discussion. “Before we begin I said, I want to challenge you to write me two things:
“One is your obituary. What would it say if you were to be run over by a bus today after our meeting?”
“Second, assuming that you live another eighty years, what do you want it to say?”
He took his assignment to heart and the next day I received the following:

Obituary today:

University of Texas student Shehryar Siddiqui passed away yesterday after getting hit by the Forty Acres bus.
Shehryar was a senior, studying Biomedical Engineering, and getting ready to go to medical school. He was young for his grade, only 20, but showed a lot of promise and potential for the future. Although he had much to live for, he still had a lot of good times with his closest friends.
Shehryar is survived by his parents and two loving, but annoying, sisters. His roommates were devastated by the loss, but stated “at least we get free tuition and straight A’s for the rest of the year”

Preferred Obituary in 80 years:

Today the world mourns the loss of businessman, inventor, and philanthropist Shehryar Siddiqui. Best known for his work in healthcare, and his companies, Shehryar fought tirelessly to improve the global standard of living. His vision revolutionized the field of medicine, and brought care to some of the most remote parts of the world. His developments helped launch humanity into a new age of immortality, finding cures for countless diseases and almost doubling the average lifespan. As a student at The University of Texas, Shehryar studied biomedical engineering. He planned to go to medical school, but after narrowly avoiding getting hit by a bus one day; he decided he would rather do something bigger with his life.
He went to work with a local venture capital firm and learned about investing and business management. After a few years of work, he got an MBA, and used his experience to start up a company of his own. The research spawned from this company laid the groundwork for his future work.
Twenty years later, as the president of a multimillion dollar company, Shehryar did something very unusual. He quit. Leaving control of his company to someone else, he joined a volunteer program and spent the next five years traveling around the world, visiting small villages, experiencing new cultures, and “choosing to help people as directly as [he] could”. When he returned to the business world five years later, he used his newfound experience to once again change the world of healthcare. His new model rolled out a global initiative to provide services for those who most needed it and could least afford it. Shehryar firmly believed that if we could improve quality of life for the least privileged part of humanity, the whole world would benefit.
At the end of his life, Shehryar was surrounded by his friends and family, and the people he loved most. He stated that he could not have made it to this point in life without all of their help and support in everything he did. He also thanked all the people who had helped mentor and guide him throughout the years. Shehryar said that he had no regrets in life, and although he made a lot of mistakes, he never felt like he missed an opportunity. His one piece of advice to others, “don’t take yourself too seriously”
Impressed with his effort I agreed to meet with him to discuss why I had given him this assignment.
“You see I explained in order to be successful you need to have a purpose. (Elementary) but that purpose needs to transcend into whatever it is you are doing. Building a business, creating a corporate empire, whatever, it needs to be tied in with the larger set of objectives. How many CEOs have allowed their business to sail into uncharted waters because they lost their way? How many businesses have suffered needlessly because they failed to check their original plans and alter them when required?

Planning with the end in mind is not simply a cliche’, it is a requirement for a full and successful life – and a more profitable business.

What about you as a new year begins NOW? Have you sat down and revised your plans lately? Does your progress tie into what will be said about you in your own obituary? Only you know for sure.

The 4th Restaurant, 4th failure

November 12th, 2014

The forth restaurant in the same location. Same venue, Mexican cuisine.

I met with the wife of the owner and introduced myself. “I know the history of this location, I explained. I also am familiar with the other previously failed restaurant ventures here and would like to set a time meet to share these insights.”
She set up a meeting between me and her husband at their other location. Unlike the new one, this one was old, dingy and smelled more like a barn then a place to dine. The man was friendly, and asked me how I could help him. I began by sharing some history of the previous failed restaurants at their new acquired location.

Each business had a separate story reflecting disastrous management decisions and poor marketing execution. My intention I explained, was to help ensure that his new acquisition would not join the graveyard of failed restaurants in this locale. This location I explained can be profitable. The demographics support it both from price points and patron capabilities.
I then offered him a menu of options from $650.00 to $5,000. While the lowest option offered ideas for quick marketing, the higher one provided a real long-term marketing strategy. “You want to start with something I suggested. Just sitting there with your sign up alone won’t cut it. Additionally, you need to demonstrate to the community that you are serious about making your place a long-term locale that isn’t like the others.”
I left him with the list of options to consider and said that I would be in touch with him in a couple of days. When I followed-up with him his reply was somewhat expected. “Let me see how many customers come in over the next several weeks – so we can start generating some revenue, then we can get back to you.” Realizing where this was going, I simply replied, “I wish you luck.”
Last week I collected on a wager I made with one of my business associates. I had guess to the day, when they would be closing. Once again, here was another restaurant owner who went into a location on the hope of succeeding but without the necessary working capital to make it happen.
Prior to this (two failed restaurant’s ago) I also reached out to the Property Management Company. My voice-mail message stated “that I wanted to meet with them to discuss how we might prevent the vicious cycle of failed restaurants in the same location from continuing.” No reply. It seems that for them, they would prefer wasting precious time and resources on getting unqualified and inadequately sophisticated businesses into their shopping center just to fill the space. No long-term planning there!
Consider if they had elected to meet to discuss how we could partner with them to ensure that their lessee’s had the business and marketing support to ensure that their new tenants were not only successful there, but from the success of this locale, be able expand to other locations as well. Perhaps the property management might benefit further by helping them in this expansion by offering additional locations. So who is at fault? The landlord or the business owners? I contend both. What do you think?

Why GPS and Spellcheck can’t be counted on – and how it can get into a lot of trouble

October 20th, 2014

spell check copy

In today’s world of rushing from meeting to meeting many of us fall into the complacent trap of relying too much on technology to take care of us. Cars get lost in western deserts because their GPS sent them on an obsolete road. So there they are, stuck with no gas or water.

But our reliance on spellcheck can easily place our drive for customer acquisition in a desert as well – from bad PR stemming from a spelling error.

Below is an example if what I almost sent out as a follow-up to a meeting with a prospective client. I misspelled the word “obstacles.” Proof reading, I knew that it was misspelled – so I let spellcheck take care of it. Thank goodness, before sending it, I re-read the message one more time. Below is what almost got sent. Can you find what word obstacles was changed to by spellcheck?

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Of course when I read what almost went out, I burst out in laughter. Then the fear set in as I began thinking to myself, what if this actually had gone out unchecked? What if the prospect lacked a sense of humor or worse, was offended? To mistakes, we all react differently. Sharing this story may save you, the reader future unnecessary grief. Next time you and your team start relying too much on Spellcheck or GPS take a pause and make sure that it really makes sense.

WHERE’S THE REST?

September 8th, 2014

It is no wonder that McDonald’s and the like continue to lose market share. Several days ago I thought I would grab a quick bite to hold me over until dinner. Typical of previous experiences, I was greeted by a barrage of irritating beepers and buzzers reminding the employees of various tasked that needed to be tended to. “Why don’t they use chimes or even more pleasant sounding bells I asked?”   “They want it to gnaw on our nerves the counter person replied as he shrugged his shoulders.”

I went ahead and ordered a chicken sandwich. When I sat down to bite into it, I discovered that there was not much there – just two buns, a slab of deep fried chicken breast and a pickle. When I brought it back to the counter and requested that they please add tomato and lettuce, and “hey, how ‘bout some mayonnaise? “He returned with it (now dressed as I had originally anticipated and then said “.30 cents please?”

Years ago the famous add for a competing chain had the little old lady asking “where’s the beef!?” Today, we are asking, “where’s the rest?!”

Between beepers, buzzers and substance-less sandwiches, I’m not planning to return anytime soon.

John Russell, the Principal of the Russell Consulting Group  seeks solutions for companies interested in retaining or growing market share with a combination of common sense corporate and management decisions intended to improving brand awareness.

GOLDEN PARACHUTE,OR CRASH ON THE ROCKS? Its up to you

August 20th, 2014

Businesses serious about bringing value for themselves, will want to understand the importance of good planning.
How many small businesses have I spoken to that could have sold for 10 to 20 million dollars if only they had planned with end in mind? Too many!
I just recently reviewed a client profile that has a business in total disarray. “I am so frustrated; I told them – that you did not retain us even five years earlier. We could have helped you build you a solid ship for success. Had we done so, then rather than figuring out a way to get you out of business (debt free) you .may have had a golden parachute worth $10,000,000.”
How sad that they missed the boat. Now the owner (in his senior years) and ready to retire has less time and energy to really turn things around.
If you are a small business owner, I encourage you to make plan with specific strategies designed to maximize your outcome for success. In addition, please consider that though you may be an expert on what you do specifically, it is equally important to surround yourself with competent advisers. It is your journey – and where you end up is often based on a plan with good navigation.