Real Estate Agent's Café

Real Estate Babel (Part 2)

  King Nimrod

In my Post Real Estate Babel (Part 1) I put forth the theory that commercial property owners may be direct descendants of the peoples of Babylon and perhaps of King Nimrod himself.

Trying to find out what charges are in addition to the rent from most property owners that I've dealt with are, at times, excruciatingly and unnecessarily difficult. And I suspect it's this way everywhere.

It usually goes something like this:

What additional charges is my client expected to pay? 

Utilities.

That's it?

Yes.

Is the cleaning included?  

No.

OK. Is there anything else?

No.

Oh, by-the-way, what about property management?

Uh, that's extra too. Note: And this is only a partial list.

Then I'll ask for a  breakdown of the cost so my client knows exactly what his occupancy cost will be. No problem! I'll email it to you today. They rarely do. After a dozen calls and badgering I'll finally get something in writing. It still may be incomplete. Something invariably will be forgotten. I call it selective amnesia. Strickens the most lucid minds. Poor things.

I don't get it! What's the big secret? Do they think that these unmentioned expenses aren't going to come up later when the prospect gets the lease? And oh boy, the sparks really start to fly. Can't say as I blame them. Who likes surprises? Especially when you've done your planning and budgeting based upon a set of assumptions that you believe to be credible.

But in the property owner's mind the more time he can burn, the less options the prospect will have. Then he'll have em over a barrel. Or, if he tells them too much, the'll scurry away never to be seen again.

What a way to start a business relationship.

I propose that we get rid of all of this jargon and just spell it out. Think of all the extra time we'll have to focus on getting new business. But, I know the mentality. That would be too scary. Or perhaps it's that genetic connection to ancient times.

Real Estate Babel (Part 1)

You probably heard the story in the Bible about King Nimrod, who fancied himself as a real estate developer, deciding to build a tower to reach Heaven. Kind of like the mid-rise suburban office buildings that you see all over the place.

Well, it seems that God wasn’t in a humorous mood that day and sent all of the workers scattering speaking in different tongues, which is why we have communication problems to this day.

I suspect that this problem in communication has carried down through the millennia to today's commercial property owners.

Ask most Landlords (or real estate brokers for that matter) what the lease rate is, and you'll get a response that it’s “X “dollars per square foot net, modified gross, net net net, double net, or some other term that gives no information at all. 

Heck, even Tenant Electric isn't clear anymore. It used to mean lights and electrical outlets. Now, it could include heat (if electric) and air conditioning.

Between "gross" rent which includes everything with the base rent and "triple net" which includes nothing but the base rent, here are no universal terms to describe what charges are included or not included in the base rental rate.

More on this subject in my next post.

The Crapper Caper

I had an interesting encounter with a real estate investor a few years back. Most of his holdings were in the market area that I serviced, so I thought that it would be a good idea to meet with him to introduce myself and my company. Upon entering his office I couldn't help be taken aback not only by the shear size and opulence of his office, but also by the huge crystal ball collection he had amassed.

I don't know if this has ever happened to you, but every once in a while something just doesn't click and the meeting labors on in an odd, awkward kind of way. This was one of those times. I found him to be a bit strange. Especially when he boasted to me that the building we were in, which he owned, was the tallest building in town. Although this happened to be true, the building was only three stories tall.

As his Secretary escorted me out I mentioned to her that her Boss had quite an impressive collection of crystal balls. Oh yes, she said,  and every so often he will bring in a fortune teller and we all have our fortunes told. 

I'm not a believer in mysticism. However, what you chose to do in the privacy of your home (or office) is your business.

I wasn't surprised to later learn that his empire had crumbled and he had lost all of his holdings, including his home, through foreclosure, which also included the "tallest building in town". Maybe having all of those crystal balls gave him too many conflicting messages? So much for fortune telling.

Not long after, I visited the now vacant space on a tour with the new owner. Gone were all of the sparkling crystal balls, shiny array of trinkets and other objects, executive desk and chair and the toilet in the private bathroom. Wait a minute. The toilet! I have heard of cases like this before, where people have absconded with their beloved commodes, but I have never visited an actual crime scene.

How did he pull this off? Did he dress up like a Ninja and on a moonless night, make his way with flashlight and wrench in hand, and ever so quietly unbolt the porcelain beauty from the floor? I can picture this blackened egg shaped figure hugging his loot, stealing down the stairwell, leaving a trail of water and jumping into his get-a-way car, burning rubber out of the parking lot.

And what was the motive? Could it be that he refused to abdicate his Throne? Or was it something more sinister? Was he holding poor Johnnie hostage to be used as a bargaining chip as he negotiated with his lender? Was Bidet involved as an accomplice? It was all speculation.

As time went on I had forgotten all about this crime until one day when I was at a business luncheon the alleged perpetrator's name came up in conversation. From the other side of the table a residential broker chimed in saying that she had the listing on his house and the lender kept asking her; what happened to the toilet? Whoa! A double hostage situation. I kept silent choosing not to compare notes with her for I was determined to solve this case on my own. And I didn't want to share any of the credit.

From time-to-time I would ask; what ever happened to so-and-so? I would hear rumors that he was residing with a woman in one of our seedier urban neighborhoods near the pawn shop and bail bond section. However, most of the information usually lead to a dead end. Until one day I caught a break. A trusted informant told me that he had seen a flyer advertising how the alleged perpetrator had reinvented himself into (and I'm not making this up people)

a "Healer".

The pieces finally came together. It was a clear case of Porcelain God Worship! Now I know some of you (not me of course), perhaps during your college years, knelt down at least once before the Porcelain God and thanked it profusely for its presence.

As he stood before his flock dressed in Monk like attire or perhaps a Snuggie (which would do in a pinch), sporting a toilet seat around his neck, with the lid up behind his head to give him that "Halo" effect, he said unto them, (click to hear what he said unto them) and proceeded to lead his followers up in single file to kneel before the Porcelain Gods to be bathed in the magical, mystical healing waters.

In the words of McGarrett; (click to hear the words of McGarrett)

 

Case closed.

 

Note: For additional viewing pleasure click the Snuggie link above for the Snuggie Parody.

 

 

 

I Can't Believe They Let This Guy Run A Company!

 

I'm meeting with a client and through the coarse of conversation she mentions to me that they're planning to add three energy efficient units to each of their seven facilities.

I informed her that I knew of a company that manufactures and installs these types of units, and if she was interested, I could have them contact her to submit a bid. "Absolutely", she said.

It just so happened that I had met the President of this particular company about a month before and knew that his product was a natural fit for what my client was looking for. A few days later as I was traveling past his facility, I decided to stop in to see if he had the time to meet with me to learn about this opportunity.

As I walked into the reception area, I noticed that his office was located just off to the side, and there he was, near his office door shooting the breeze with what appeared to be a sales rep. Pretty good luck, I thought. I introduced myself to the receptionists, explaining to her that I would appreciate a few minutesof Mr. So-and-so's time to inform him of a potential new business referral for his company.

She asked me to take a seat, which was in clear line of site to where the President was standing. Finally, he finished his conversation with the sales rep and walked back to his desk facing his computer on his credenza with his back to the door. The receptionist called in and said that I was here and would like a few minutes with you about referring you a new business opportunity.

Without even a hint of interest or curiosity to hear what I had to say, He replies "Tell him to make an appointment"  I couldn't believe it! He couldn't give me a couple of minutes! It's not like I haven't met this guy. I wasn't looking for anything in return. I was just interested in adding some value for my client. If he happened to remember me down the road when he was planning something with his real estate, fine. But that's not why I was there.

It really blew my mind. I was seeing red! As I was leaving, I couldn't help myself, I passed his door and loudly said "I was about to refer you 21 units!"

I wonder if I sent him this story he would recognize himself. Probably not. It's really dark up there.

How To See Through Real Estate Broker Tricks

Forewarned is forearmed. This one really burns my ass. The problem is that this slick piece of propaganda will be believed to be true. You'll notice that it really doesn't advise the viewer on how to select a broker. It does a better job in scaring the viewer into going FSBO.

It says 50% of house hunters look on the Web for homes, but it doesn't say how many are actually sold that way. I get the feeling that the creator of this piece of work has a real ax to grind. Perhaps they were to stupid to pass the licensing exam.

Not One Of My Better Days

 

Suffice it to say, I hate flies. HATE em! Not to be confused with pteronarcophobia (fear of flies). I have a fundamental rule; Stay outside, you live. Come inside my house, you die. And when one is dumb enough to enter my domain, I will hunt it down like Dog the Bounty Hunter. I have even pursued these flying feces to the point of causing them to die from exhaustion.

My Wife and Child are so conditioned, that when they see me dashing for a magazine, they dive for cover behind the nearest piece of furniture to avoid becoming collateral damage.

I feel no remorse.

Even when I dine out I try to avoid sitting by the window in the restaurant because I can't stand them buzzing about, banging their tiny little fly heads against the glass, too stupid to figure out why they can't get outside.

And, I'm in good company. President Barack Obama is a ruthless fly killer. Don't believe me? Check out the clip.

Yeah! Now that's what I'm talkin about! Did you notice that for a split second his eyes glazed over like a sadistic cold-blooded serial fly killer. He even had the camera man zoom in on the winged devil as it was convulsing its last breath. My kind of Leader. Now only if he would do that to the lobbyists and special interest groups our voices might be heard.

But, that's not the story. This is: 

After finishing up a long morning showing office space to a client, we stopped to have lunch. My Branch Manager was also along for the ride. It was a welcome respite. All of our eyeballs were rolling around in our heads from the continual starting-and-stopping, and in-and-out of the car that goes with a long tour.

The hostess brought us to our table, seating us in the corner of the solarium section of the restaurant. After we settled in and our drinks were served my Branch Manager, who without deviation projected a board-up-the-ass personality, decided to become animated, as if someone had flipped a switch.

As he's talking and gesturing with his hands, he smacked his beer bottle and spilled the contents in my lap. As the ice cold liquid soaked through my pants, my underwear, and onto my crotch, the temperature from my neck up was reaching the  intensity of a nuclear reactor. Somehow, I managed to maintain my composure, and after I cleaned myself up, everyone had a good laugh at my expense.

We continued with our lunch, as my Branch Manager droned on, and on, and on to the point that my pants were starting to dry. As this was going on I began to notice a buzzing sound around me. I looked up and saw a number of (you guessed it) congregating on the solarium glass. Evidently, flies like beer! Who knew?

As my focus now shifted to watching this build-up of Biblical proportions, I could swear that the light in the room started to dim from the growing black mass blocking out the Sun's rays. Being a believer in Karma, I was beginning to think that I was about to face pay-back time.

When we finally finished I couldn't get out of there fast enough. I got home and shared my experience with my Wife, and had a good laugh over it.

The next morning I left to go to work and as I was driving down the street I could hear that dreaded buzzing again. I looked in my rear view mirror and what did I see banging their tiny little heads in my rear window? You guessed it again! They had followed me into my car.

You'll have to excuse me. I just saw something whiz by through the corner of my eye.

Click below for the final outcome.

Something's Better Than Nothing

I've lost count of how many times I've come across the wise guy that listens to all of the real estate market gloom and doom that the media spews out and expects to "steal" a deal.

Case-in-point; I'm speaking with a lawyer (of course) who is looking to relocate his office. In the market he's considering, space is ranging between $21-$23 per sq. ft. As we go through the candidate buildings, he, naturally, zeros in on the most expensive building in the market. He then instructs me to submit a proposal to the Landlord for $12.00 per sq. ft.

I explained to him that the offer is too low to be taken seriously and I didn't think $12.00 would even cover the landlord's mortgage payment. He snapped back saying that he didn't care and that the "Landlord should go to his lender and renegotiate his loan". "The market's in the tank". "Something's better than nothing".

Yeah right! Go through all of that brain damage just for the honor of having this wise-ass as a tenant. Or run the building at a loss just to accommodate (subsidize) his business.

If a rational person thought it through, a landlord willing to take a steeply discounted deal would, in my mind at least, be suspicious. I'd wonder if he was already planning to let the building go into default and pocket the rent money for as long as he can.

What's it mean for the tenant? Services to the building get cut.

• Landscaping goes to pot.
• The building starts to look tired.
• Cut back on cleaning service.
• The parking lot isn't maintained.

• Heat and air conditioning doesn't function properly, and on-and-on it goes.

But, the tenant got what he wished for: Cheap space in what used to be a class building.

I think on the flip side of this is when you meet a property owner who says that he's interested in selling his building, and when you ask him what price he has in mind, he says "bring me an offer".

Thick As A Brick

 

Ah the 80s. When suburban office buildings sprouted like mushrooms and developers through lavish broker receptions in the hopes that the brokers would remember them when they had a customer. It was said that at the peak a salesperson could eat three squares a day just going from reception to reception. And the giveaways: Note pads, cups, toys and a variety of useless objects that were large enough to fit the building and developer's name.

I think the most ridiculous and absurd promotion I saw at the time was the day I got to the office and on my desk was a rectangular box. The weight of it surprised me. Inside the box was a brick. Yes a brick. With a pink ribbon around it. Gee, now what I'm I suppose to do with a brick?

I noticed that the brick had been sent by the developer via US Mail. Then I looked up and saw that there were rectangular boxes on every desk. Now, you have to appreciate, we had close to fifty salespeople in this office and all had received a brick. I can only assume that bricks were sent to all of the regional commercial real estate companies. The number of salespeople receiving bricks had to be in the hundreds.

You know, I never remembered the name of the developer or the building that these extra bricks came from. I only imagined what it must of been like for those unfortunate mail carriers with commercial real estate companies on their routes that day.