I am interested in a three story office building, that is fully occupied by tenants. I want to turn the building into mixed-use with a residence on the top floor. Do I have to wait until the current lease runs out before I do that?
Thanks.
That will depend on the laws of your state. Spend $150 for an attorney’s time and they can tell you or call the state yourself and save the money. You do have options available to yourself though. I’ve negotiated with sellers before that the existing tenants be evicted and their leases terminated before we closed. Then the burden is on them. Also, you could offer to the existing tenants that you will move them to another space that you may have in turn saving them money, etc…Finally, you could offer the current tenants something, i.e. money, to move out. I’ve had tenants with 2-3 months remaining on their leases and I have went to them and said ‘hey if you move out 2-3 months early I will credit you 1 months rent plus your full deposit’. Of course you’ll have to evaluate what will work for your situation but there’s some ideas, hope it helps.
Thanks. I live in California, so I will check with the State, and explore those options.
Leases generally go with the building, and commercial tenants generally already have lawyers and are more willing to fight you because moving a business is a heck of a lot more expensove than moving a residence.
Those must be some lousy tenants if you aren’t happy to just keep on collecting their rent checks and leave well enough alone until their leases expire.
you should definitely check the current leases for details. When a tenant leases an office they have an expectation that they will be able to conduct their business with only reasonable interruptions from the landlord/owner. You might be able to build the residential while the office operations resume without too many problems. Then again, maybe not. depending on local zoning, you might have problems even putting residential in a commercial area. You’d have to check to be sure.
Residential on top of commercial is actually getting very popular here in seattle. There are a few firms, mostly architects, who are making it their specialty, like Mithun. I would venture to say there are a few other firms around the country who are doing the same.
You might want to do a quick search on the internet to find someone in your area who might be able to give you some guidance.