Charlotte NC Commercial - Blog , NewsletterCharlotte NC Commercial - Blog , Newsletterhttps://www.charlottenccommercial.com/blogs/NewsletterFri, 17 Apr 2026 14:18:53 -0700http://zoho.com/sites/<![CDATA[How To Deal With Security On Your Commercial Property]]>https://www.charlottenccommercial.com/blogs/post/how-to-deal-with-security-on-your-commercial-property

How To Deal With Security On Your Commercial Property

Commercial security involves systems and strategies designed to protect businesses and properties from threats like theft, vandalism and unauthorized access. It not only safeguards physical assets but enhances tenant satisfaction and business continuity. Effective security measures include advanced surveillance cameras, access control systems and alarm systems to insure the safety of assets, employees, and visitors.

The problem of security is a major concern of owners and managers of office buildings or other commercial properties. There are many things to check both inside and outside of a property. Particular attention must be given to the perimeter of the property, as this is where an intruder will make the first contact.

For example, an office building should be inspected thoroughly all around the exterior to search for danger spots. No area should be overlooked because entry is possible from almost any point. The age, design, and location of a building will affect perimeter security.

Older buildings can have more security problems because of the style in which they were built. Often there are street-level windows, exterior fire escapes, and operable windows. Each can increase the number of entry points that must be protected.

Every building will be different, of course. Each will have to be checked, starting at a point and going around the property to return to that point.

Here are some things that will always need to be checked carefully: 
  • Fencing. If there is a fence around the building, is it just ornamental or will it actually protect the property? Are there any vulnerable spots? If there is no fence, is it feasible to install one?
  • Loading dock. How is the dock controlled during regular operating hours? After hours? What personnel are involved? Are there procedures to control deliveries and removal of materials? Is the dock left untended at any time.
  • Windows, fire escapes, & roofs. Do any of these areas pose potential access problems? If any do, should new grates or locking devices be installed? Check on your local codes.
  • Entrances and exits. (Pedestrian and vehicular). How many entrances and exits are there? Where are they located? What kinds of locks are used? Are the locks effective and who has the keys?  What are the hours of operation of each entrance and exit? Is there any kind of alarm system to signal when a door is open? Who responds to these alarms? Would closed-circuit television (CCTV) cameras be of value in any of these locations? If CCTV is used, are the monitors always watched? If there is a parking lot or garage, are the access routes safe?
  • Guardservice. If there is a guard service, what are the guards’ assignments in regard to controlling daytime and after-hours traffic and patrolling the building’s perimeter?
  • Exterior lighting. Is there adequate lighting that can serve as a deterrent to crime? Do time clocks or light sensors control the lights?
  • Landscaping. Are there possible hiding places along routes to and from the building?
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]]>Mon, 02 Mar 2026 09:21:19 -0500<![CDATA[Four Important Factors To Check With Any Ground Lease]]>https://www.charlottenccommercial.com/blogs/post/four-important-factors-to-check-with-any-ground-lease

Four Important Factors To Check With Any Ground Lease

Landowners may choose the ground lease as a way to benefit an easy and risk-free investment vehicle and as a way to secure the long-term appreciation of the property. Sometimes a ground lease can put the lessor at risk. That is because the deal centers on the concept of sharing economic returns. The lessor becomes a partner of the lessee because the total rent is usually determined by the lessee’s net operating income or net cash flow. If the lessee does well, the lessor does too. However, if the lessee’s business is a loser, so is the lessor.

Therefore, the lessor must consider the financial feasibility of the project. Independent analysis should show that the project represents the correct improvement of the site and that the projected payments will actually be received by the lessor.

There are at least four things that a prospective land lessor should remember before entering into a transaction:
  • In most land lease transactions, the economic return to the lessor ultimately reflects the underlying performance of the real estate operated by the lessee.
  • The lessor’s evaluation of the deal must focus on the quantity of income projected pro forma but also must include a clear assessment of the likelihood of actual receipt of projected rent.
  • Because the conditions and complexities of a land lease can mask the risk associated with achieving the projected rent levels, accurate assessments of the strengths and weaknesses of the real estate is essential.
  • Land lease provisions must be tested against the current fee value of the land.
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]]>Mon, 02 Mar 2026 09:21:00 -0500<![CDATA[Subleasing For Commercial Tenants]]>https://www.charlottenccommercial.com/blogs/post/subleasing-for-commercial-tenants

Subleasing For Commercial Tenants

In some office building markets throughout the country, some existing tenants have sought to sublease some or all of their rented space as they shrink operations or eliminate locations. The problem for landlords is whether it is a better strategy to enforce lease restrictions against subleasing or to work with tenants on the theory that the sooner cheap sublease space is filled, the better for all. (In addition, another problem could be whether landlords should insist on sublease restrictions in new leases being negotiated now.)

The Restrictions
If there is no provision against the sublease in the original lease, the tenant has the right to assign or sublease without the owner’s consent or approval. However, most leases do contain this provision. In previous decades, when rents were at high levels, tenants could obtain the landlord’s consent only if no other space was available in the building, and even then, the landlord might have insisted on sharing in any profit realized on the sublease. (In those days, subrent was often higher than the prime rent.)

Tenants are interested in cutting costs of unused space and are often willing to accept current market rents, something landlords are reluctant to do for prime space.

Negotiation
Although the building owner may take the position that no consent will be given to a sublease as long as prime space is available in the building, the tenant may make some good arguments for cooperation.

  • First, when there is much space available all around, a tenant looking for space can find it easily. A landlord is better off having a tenant in possession, even with a sublease, because the tenant may stay when the sublease expires.
  • Second, the landlord takes the risk that a prime tenant with much excess space may default under the lease either by being forced out of business or because the tenant is willing to risk a lawsuit to collect unpaid rent. By being cooperative in finding a subtenant, the landlord reduces the risk of a default by the prime tenant and has the additional security of the subtenant’s rent payments (even though the amount may be less than the prime rent).
  • Perhaps most important, the landlord may gain the reputation for good tenant relationships that can help in the competitive years ahead. Helping the tenant to shed excess space can pay off when the tenant considers renewal of the present lease. Landlords who are known for taking a reasonable approach to tenant problems, both during and after lease negotiations, are bound to have an edge when a tenant must make a choice between very similar rental space in different buildings.
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]]>Mon, 02 Mar 2026 09:20:47 -0500<![CDATA[Taking Action For Overdue Rents]]>https://www.charlottenccommercial.com/blogs/post/taking-action-for-overdue-rents

Taking Action For Overdue Rents

A critical indicator of a management company’s success is their effectiveness in controlling overdue rents. A well-run property should not have chronically delinquent tenants. However, when delinquency does occur, immediate action must be taken. A list of all delinquent rents must be prepared showing all tenants who have not paid, or for those who have partially paid rents and other monies due. In addition, a delinquency report recording the manner and date of all collection attempts should be prepared.

When initial notification of the delinquency does not help, the property manager should review the lease’s termination rights and consider possible legal action against the tenant. Should a delinquent tenant suddenly vacate the premises, late charges and legal fees should be deducted from the security deposit.

Finally, if repeated notices and personal visits by the property manager fail to remedy the delinquency, the manager should contact legal counsel, research relevant state and local laws, and prepare to file eviction proceedings for nonpayment of rent.

The Legal Action
Each month, the property manager should review the delinquency report outlining all telephone calls, personal visits, notices, and other actions taken in an effort to collect the rent. This report, along with the tenant ledger, will help determine what legal action, if any, should be taken against each delinquent tenant.

Tenants who generally pay rent on time should be granted an extended grace period in which to pay. In many cases, the initiation of legal action will induce habitual late payers to remit rent monies owed; however, eviction procedures should begin immediately for tenants who are suspected of moving, as well as for those who continue to refuse to pay. Copies of the tenant’s lease and the tenant ledger should be forwarded to the attorney, who can then begin legal action.
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]]>Mon, 02 Mar 2026 09:20:36 -0500<![CDATA[Check Tenant Stability In A Sale Leaseback]]>https://www.charlottenccommercial.com/blogs/post/check-tenant-stability-in-a-sale-leaseback

Check Tenant Stability In A Sale Leaseback

When an investor is looking for a management free investment, nothing can beat a sale/leaseback. This is the ideal investment for an absentee owner because the tenant pays all the operating expenses and the investor-owner usually has a completely management-free and trouble-free investment. Typically, the tenant–who is the former owner–will take care of the property. Therefore, a sale-leaseback can be an excellent investment. Watch out though! Make sure that the tenant is dependable and able to pay the rent regularly and promptly.

The Transaction
Let’s say the Smith Corp. owns and operates a manufacturing plant. The corporation wants and needs to free up the capital invested in the plant for other corporate uses. So, Smith Corp. offers to sell the building and lease it back from the new owner.

Result: The buyer gets a fully leased property, with an experienced and known tenant already in place.

It sounds good, but here are some things the buyer needs to take a very close look at:

What You Need To Check
  • Tenant stability. The rental income and the profitability depend on the success of the tenant. A stable, top-rated tenant with a history of past performance is the best kind of tenant to have in a sale/leaseback. Try to determine whether the tenant has any reason other than to free up capital for wanting to sell the building. Is the Smith Corp. getting ready to relocate to another part of the country? Is the product manufactured in this plant being removed from its product line? Is the company in financial trouble and is in need of the cash to try to survive?
  • Building Design. Be careful of single purpose buildings. If Smith Corp. must close its doors, will the building be usable by another tenant without a major overhaul?
  • Location. Is the building located in an area suitable for other tenants in the event it must be re-rented?
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]]>Mon, 02 Mar 2026 09:20:25 -0500<![CDATA[How To Deal With High Risk Troubled Property]]>https://www.charlottenccommercial.com/blogs/post/how-to-deal-with-high-risk-troubled-property

How To Deal With High Risk Troubled Property

In any market, good or bad, there are always problem properties. Most are only troubled or problem properties because of the current ownership. Some may be neglected only because the present owner has failed to do fairly simple things that can solve the problems. Buying property and solving problems is a profit-making business.

Have you seen:

    • An empty office building.
    • An apartment house or hotel that has an excessively high level of vacancy.
    • A large tract of undeveloped land that no developer has become serious about wanting to develop.

These are examples of troubled properties.

Properties that are a definite financial burden to continue to hold but which also are unattractive properties to some prospective buyers.

The timing may be right for investors to obtain troubled property at bargain prices. The pressure on owners and lenders with troubled property to get out from under the on going burden is also high. The result is that syndicates have been formed to seek out and buy up troubled properties.

The High Risk

Knowledgeable property developers and managers (especially those familiar with empty or near-empty office, hotel, and apartment buildings) caution that buying a troubled property requires taking a very high risk. The financial returns are uncertain and may be a long time in coming. This type of investment is not for everyone; it’s for those who can afford high risk situations.

The profits can come from any one or a combination of circumstances.

    • A market turnaround caused by a boom in the local and/or national economy.
    • An improved system for promoting and operating the property. Some syndicates are being formed solely to manage the troubled property with an option to buy when and if it hits a specified profit level.  
    • Purchase of the property at a bargain price, often combined with imaginative and untraditional financing techniques.

Some lenders are asked to share the financial risks by accepting a low initial interest rate in return for a big share of the profits later on. Sometimes the seller of the troubled property is asked to retain a financial stake in the property and to help turn it around. The seller’s experience and involvement in the project from the start can be valuable.

    • Including the troubled property in a larger development plan. An office building that sits empty might become part of a new industrial park with hotels, conference facilities, and residential apartments, all of which are successful.

Take another look at troubled properties in your area. With fresh new ideas and a re-structuring of the mortgages, the troubles may go away, leaving a profitable investment for you.

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]]>Mon, 16 Feb 2026 13:41:31 -0500<![CDATA[Corporate Shared Office Space]]>https://www.charlottenccommercial.com/blogs/post/corporate-shared-office-space

Corporate Shared Office Space

The Buyer
With the revolution in communications, building owners must keep up with the changing needs of the corporate tenant. Often the larger, well-organized businesses do not need the space that was necessary just a few years ago. Electronic communications to and from employees have substituted for leased office space. Managers are more willing to grant favorable lease terms to operators of shared space. The operator sometimes receives a monthly management fee for operating the shared space plus a portion of rent revenues over a certain amount.

Solving Tenant’s Needs
Tenants in an office suite are offered a private office within the suite that has a receptionist, secretarial help, conference rooms and other amenities. This can be a big saving for small space users or users who need a small office for only a short period of time. Another user is from the large corporation that needs small branch offices in different parts of the country. Other users might be individuals who need a private space for investment or other work activities as well as professionals such as attorneys or accountants who work primarily away from their offices.

Existing Leases
Companies that have excess space that cannot be leased in its entirety can use the concept of shared space. The company’s existing facilities such as copier rooms, computer work stations, reception areas already are available. Any income from this type of shared space can be nearly 100% profit.  If this is space that is leased by the company rather than owned space, the lease must be reviewed carefully to see if a sublease could violate the sublease/assignment clause of the lease.
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]]>Sun, 01 Feb 2026 13:27:00 -0500<![CDATA[Question A Provision In The Lease]]>https://www.charlottenccommercial.com/blogs/post/question-a-provision-in-the-lease

Question A Provision In The Lease

When a landlord and a tenant agree to a commercial lease, it may contain clauses covering things that neither party to the lease ever expects to happen. Occasionally, one of these will happen with costly and damaging consequences to the tenant.

One lease clause that may seem very reasonable to a tenant is one that agrees to subordinate the lease to any future mortgages that the landlord may place on the property. After all, it is reasonable for an owner to want to refinance a property. The result of the provision is that the foreclosure of a mortgage loan will either automatically terminate the lease or entitle the lender, at its option, to terminate the lease (depending on the law of the state involved).

Tenants entering into leases at current market rentals often assume (if they think about the problem at all) that any foreclosing lender will be happy to keep them as tenants. This may not be the case, however, if market rents have risen sharply or where a tenant has received substantial concessions in the form of free rent periods or below-market renewal options–a common situation in an oversupplied marketplace.

As a result, a tenant who may have spent hundreds of thousands of dollars in improving office premises or fixturing commercial space could conceivably be put out of business in the event the landlord defaults on the mortgage. At the very least, the tenant may be able to retain possession of the premises only by accepting a lease with much less favorable terms.

Non-Disturbance Agreement
The landlord wants the lease to be subordinate to mortgages because financing otherwise might be unavailable. A lender may not be willing to finance a property if, in the event the lender takes over, it will be saddled with the existing leases that may be the cause of the landlord’s problems.

A small tenant in a large building is not likely to get very far in seeking to eliminate the subordination clause. However, an office tenant taking a large block of space, or a commercial tenant prepared to invest a substantial amount in a restaurant or retail facility, is in a stronger bargaining position. Such a tenant may agree to subordinate only if the tenant receives in return a non-disturbance agreement (also known as a recognition agreement). This provides that so long as the tenant is not in default under its lease a foreclosing lender will recognize the lease and permit the tenant to remain in possession for the balance of the lease term. The clause normally also provides for “attornment,” that is, requiring the tenant to acknowledge the lender (or other third party) as its landlord entitled to receive rent.

Will the Lender Agree
A Lease that provides for tenant subordination only in exchange for a non-disturbance clause will not guaranty that a future lender will agree. At the very least, the lender may insist that certain conditions be met before the tenant will be assured of non-disturbance. These conditions should be included by the landlord in the lease clause itself.

Typically, these include the following:
  • The lender must not be liable for any unperformed obligations of the original landlord (e.g., unpaid tenant allowances) or be obligated to recognize any rent prepayments by the tenant or future periods of free rent.
  • The tenant must not be in default under any provision of the lease.

Note: The main objection of a lender to giving a non-disturbance agreement if the lender takes over the property is that rents may have risen above the contract rental. The landlord then may want to include in the lease a provision that, in the event a lender does take over, the tenant will agree to pay the market rent (as determined by an independent third party). A tenant is not likely to agree to this, except possibly in exchange for an option for the tenant to cancel the lease if the new rent is unacceptable.
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]]>Sun, 01 Feb 2026 13:25:00 -0500<![CDATA[Investing To Make Money]]>https://www.charlottenccommercial.com/blogs/post/investing-to-make-money

Investing To Make Money

When you make an investment in real estate, it is implied that you want to make money. The cash can come from direct income from the property or from capital gains from a sale after an increase in value. Either way, the investment must be managed, considered, and watched at all times. If the owner and manager are taking care of business, there may be ways to increase the income, and the value. There is always the possibility to make a sale for the right price and terms. Keeping aware of the market might bring an opportunity to make a tax-deferred exchange into a property with more benefits for the owner.

Real estate investors often own various kinds of properties. They may have a mix of commercial, residential income, land and groups of houses. These owners have an extensive portfolio of investment real estate.

Owners of portfolios of stocks and bonds meet with or call their broker often. Like seeing a doctor or dentist at regular intervals, it makes sense for real estate investors also to meet with their real estate investment representative or counselor at least a couple of times a year. Exchanging ideas with the professional who has the daily pulse of the real estate market can be profitable. At each meeting, the investor can plan on finding out the current market conditions that will have an effect on equities that are now owned or that could be acquired.
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]]>Sun, 01 Feb 2026 13:22:00 -0500<![CDATA[The Totally Neglected Property]]>https://www.charlottenccommercial.com/blogs/post/the-totally-neglected-property

The Totally Neglected Property

It is hard to believe that someone can totally neglect a valuable investment property like a multi-unit office building or an apartment complex. It happens. The run down property may have been acquired from a seller who did not understand real estate investments and failed to manage it.

The professional investor can usually spot the low-priced and currently unprofitable income property that can be purchased, then upgraded with some reasonable expense so that it becomes a cash flow property. That property can then be added to the investor’s real estate portfolio or quickly sold for a profit.

A professional management company must take over the property. It is faced with a problem property that the new owner has purchased for the purpose of a “turnaround” for profit.

The new manager must first develop a plan that will help the investment become a success as soon as the new owner takes physical possession. This plan must be short term to get the rents coming in and long term to make it a productive property in the future. The following are some points in a typical plan to create a profitable investment from an underperforming office or apartment building.

Cash Flow
Rental activities and property management functions must be centralized.
Management was nearly nonexistent or the units would not be underperforming. Management efficiency must be improved immediately. For cash flow, rent invoices are mailed on time and payments from tenants can be sent directly to the bank for deposit. Computer financial software can be used for budgeting and for cash management.  A professional management company will already have standard procedures set up and designated employees to carry out maintenance and repairs (schedules for regular tasks such as pool cleaning and landscape maintenance as well as routine requests by tenants for minor repairs such as leaky faucets or cracked windows).

Operating Expenses
After budget is set up, all operating expenses and actual expenditures must be compared to the budgeted amounts. Analyze whether tenants should be required to pay for utilities and whether the real estate tax assessment should be protested. (Tax assessment might reflect the time before the property was underperforming.)

Property Improvement
Over-improvement of the property too soon can be a mistake. Concentrate first on improving the physical condition of vacant units; then consider making improvements for occupied units that will justify a higher rent when lease is renewed.  An effective way of controlling capital improvement costs is by adopting a regular maintenance program with the standard procedures.

Leasing Policy Changes
Assess the current leasing policies regarding tenant credit checks and screening, discounts for signing or renewing leases, security deposit amounts, and procedures for dealing with delinquent rents. Search for new ways to alter the tenant mix in the underperforming building so as to generate greater profits. Policy changes regarding base rent, for example, may impact favorably on the vacancy level and on payment delinquencies, resulting in a more profitable building as a whole.
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]]>Sun, 01 Feb 2026 13:20:00 -0500