My mom now too old to deal with day to day has managers for a three unit commercial bldg. One unit has not been rented for over a year due to poor economy and competitive rates in Riverside Co. One of her units lease is up near end of year and has been there for over five years. It’s an auto repair biz and there has been problems with toxic materials (oil, used oil, oil filters, solvents, paints, etc not properly removed off premises. He was keeping too much on site for fire safety.)
The current management company says they will do the renewal for the expiring lease but wants 3% commission for the duration of the lease, usually two years. Past management companies has included that duty in their contract. 3rd party brokers have leased units when empty for a small base fee plus 2%/mo for lease duration.
What is the current market price for a agent or broker to get the lease renewed? Is there a flat fee formula?
Thanks for any insight or pointers on this matter.
Sean,
Management company pays bills, collect rents, answers questions/complaints from tenants, vendors, etc. Building and landscape maintenance, this is a 20,000 sq-ft tilt-up.
So far we have found a 3rd party broker that will do the lease renewal for $400 flat fee. It that a fair price?
The way I see it, I take the old lease and change the date and have the tenant sign it. So $400 looks high.
Maybe there is more to this renewal of leases I’m not aware of?
Ron
I say do all that yourself and save the 3%. I would read through it and understand it completely. But I think you are fine changing the dates and the rents and reusing it. I don’t think you need to involve a broker you already have the lease and I’m assuming you negotiated the rent and any extras.
My recommendation is to read and understand the lease, consult an attorney with any questions on verbiage or changes to current lease format, and manage it yourself. Make sure you understand the numbers.