Charlotte NC Commercial - Blog #TenantsCharlotte NC Commercial - Blog #Tenantshttps://www.charlottenccommercial.com/blogs/tag/TenantsTue, 20 Oct 2026 04:31:43 -0700http://zoho.com/sites/<![CDATA[The Success Of A Prospective Tenant]]>https://www.charlottenccommercial.com/blogs/post/the-success-of-a-prospective-tenant1

The Success Of A Prospective Tenant

Owners must think about vacancies when checking a prospective tenant. Will the tenant’s business survive? When you have a prospective tenant for a commercial center, you must consider whether that prospect would be a good tenant. There are two key standards to apply; (1) the prospective tenant’s financial stability; and (2) the prospective tenant’s potential for success.

Financial Stability

The prospective tenant must be able to afford the rental that you set. Its overall financial condition should be sound. Among the first things you’ll do is to see if the prospective tenant pays its bills on time. Having a reputable credit agency do a credit check on the tenant can easily check this. It is also wise to talk to the tenant’s main suppliers and its current landlord.

An examination of the tenant’s assets is also essential. Ask to see the tenant’s financial records, study them carefully, and discuss with the prospective tenant’s accountant any questions you may wish to have clarified.

Once you are satisfied that the prospective tenant is financially stable, you must ask the question: Will the tenant be successful in your center? To answer this question you must determine the following;
  • The tenant’s reputation at its present location.
  • The tenant’s sales volume. In the retail business, a turnover of stock at the rate of four to five times a year is considered good.
  • The trend of the tenant’s sales. Has the tenant’s sales been increasing from year to year?
  • The type of merchandise the tenant will be selling in your center. You’ll look to avoid duplications with other tenants in the center.
  • The profile of the tenant’s average customer at its present location.
  • How efficiently is the tenant’s business now being run? Is the efficiency or inefficiency likely to continue?
  • The nature and extent of the tenant’s advertising.

No Track Record
The preceding is for the prospective tenant who has an established record, who has been in business and offers tangible evidence of performance. But what about a newly owned business that wants to rent space in your shopping center as its first-ever place of business?

You should appraise this kind of prospective tenant by using the same two key standards: financial stability and potential for success. But instead of looking at past records, you will be predicting and forecasting and making judgments about the prospective tenant’s ability, ideas, and business expertise. It is a riskier situation for the center’s owner-manager but a totally new business might generate totally new interest in the center. It’s not the same old merchants merely doing business from a new location. 

]]>Thu, 01 Oct 2026 15:41:00 -0400<![CDATA[Variations of Commercial Leases]]>https://www.charlottenccommercial.com/blogs/post/variations-of-commercial-leases

Variations of Commercial Leases

A lease is an integral part of many real estate investments. It should outline all the obligations of the tenant and of the landlord. This sounds simple, but many questions arise. If, for example, property taxes increase, does the tenant pay all of the increase or only part of it? If the property must be modernized, who pays for the improvement? Can the tenant be moved out during the renovation? If the costs of servicing the property rise, should the tenant pay none, all, or part of the increased costs? How should inflation be handled—with automatic rental increases? With increases tied to some index, perhaps the Consumer Price Index?

Kinds Of Leases
Here are some of the variations of leases used on commercial and industrial properties:

Flat Rate Lease. This is the traditional lease in which the tenant agrees to pay a flat periodic rate for the term of the lease. This might work with a very short lease, say one year.

Net Lease. Some investors try to protect their net income flows by requiring the tenant part (double net) or all (triple net) of the expenses. For example, the tenant may pay the property taxes; or property taxes and insurance; or property taxes, insurance, and all maintenance and operation expenses. When a net lease is mentioned, always ask what the landlord pays and what the tenant pays.

Sandwich Lease Or Subordinated Lease. The tenant leases all or a portion of the property to a third party who pays to the original tenant. The sandwich lease may be at a rate slightly higher than the original lease payments, thus allowing the tenant to make money from such an arrangement. For this reason, some leases do not allow subleasing.

Percentage Lease. The amount of rent is related to a fixed amount, plus a share expressed as a percentage of the gross or net sales or profits of the business to be paid as additional rent.

Ground Lease. Only the land is rented. The tenant owns the improvements. When the lease ends, provisions are made for allowing the tenant to buy the land or the landlord to buy the improvements.

Leasehold Estate. The value of the lease to the tenant. If the tenant has negotiated a rent below market the tenant has a valuable right (perhaps by subletting at market rents). If the rent is above market the landlord has an advantage, but if the tenant is a strong, credit-worthy tenant the lease may be subject to renegotiation.

Index Lease. The lease amount is related to an index and changes as the index changes. For example, banks located in shopping centers cannot be charged on the basis of percentage of sales because there are none. In such cases an index such as the Consumer Price Index might be used.

Renegotiable Leases. The rents are subject to review and renegotiation at a particular event or after a given number of years. These are usually related to inflation measures and indices.

Improperly drawn leases may not produce enough income to cover the costs of owning and operating the property. And long-term leases in particular present problems when prices, costs, and money rates are fluctuating. There is no substitute for a lease prepared by a skilled professional.

]]>Thu, 01 Oct 2026 15:37:00 -0400<![CDATA[Analyzing Office Building Vacancies]]>https://www.charlottenccommercial.com/blogs/post/analyzing-office-building-vacancies

Analyzing Office Building Vacancies

Office buildings are excellent commercial properties to own. One of the most important jobs of a leasing agent for a building with available space is to analyze other buildings to see if any tenant could be induced to move.

Newer buildings may fill up at the expense of older buildings. Since new buildings cost more to build than the older ones, rents may be higher. The actual dollars-per-square-foot costs must be compared, along with other benefits that the tenant may receive, before a final decision is made by the tenant on staying or moving. Here are some of the items for comparison;

  • What is the time factor for employees at the old location? In a business’ expansion at the old location, they may have expanded to different floors or to different buildings as more space was needed. There may be a big loss in employee time due to the inconvenient layout.
  • In a similar idea, the tenant may be planning an expansion in the next few years, which will make it necessary to rent space in the old location at then-current rentals, raising the average rental per square foot for the tenant’s entire space, in a less than adequate location.
  • Don’t assume that the new space rentals are not competitive. Cost-of-living clauses in the tenant’s existing lease may have escalated the rent level up to the costs in the newer, more modern building.
  • The newer building represents more efficient design, better and newer lighting, modern in every way. The intangible improvements in employee morale and efficiency might overcome any slight difference in dollar-costs per month.
  • Finally, a change in location to a more, prestigious building in a better part of the community can contribute to the reputation of the tenant–and ultimately to the profitability of the business.
  • The tenants who could be good new tenants at the new location will usually not be aware of all of the benefits of a move until they are contacted and are given the opportunity to make the comparison.

]]>Tue, 01 Sep 2026 08:43:00 -0400<![CDATA[How Good Management Enhances Value]]>https://www.charlottenccommercial.com/blogs/post/how-good-management-enhances-value

How Good Management Enhances Value

Property managers who concentrate on tenant satisfaction, energy efficiency, cash management and investment analysis will increase the value of the owner’s investment.

Being a skillful manager also requires intelligent handling of the functions of buying and selling properties, rent collections, maintenance, leasing, controlling expenses, refurbishing, management accounting and more. All of this requires long “hands-on” experience in the field.

Here are some of the ways the property manager now must focus on asset management and efficiency that will enhance value:

  • Watch where money is going. Begin a mandatory competitive bidding process from all vendors. This will control spending and increase profits.
  • Energy prices are rising. Constant lighting is not necessary in many common areas. Review all areas and install more efficient fluorescent lighting and motion detectors in restrooms, freight elevator lobbies, etc.
  • Check lease provisions to be sure that tenants are adhering to the lease. For example, a lease may call for the building use from 7 a.m. to 6 p.m., Monday through Friday. Checking may reveal that some tenant’s employees are working until 9 p.m. and on Saturdays. A surcharge for the additional energy consumed might be added to tenant’s rent.
  • Some simple rewiring and plumbing can add income. Split the utility systems to install electric and gas meters billed directly to each tenant. Tenants who pay their own electricity and heating bills are always more careful with energy usage.
  • Tenant satisfaction must be the highest priority. Set up a tenants’ questionnaire to find out any specific tenant problems. These then can be addressed and problems solved. Showing concern for tenants and any problems helps to avoid lease cancellations and promotes lease renewals.

One role of a top real estate Company is to maximize the value of the investment. The watchwords today are tenant satisfaction and cost efficiency.

We can handle property management for any properties you might own. Let us help in determining the value of your investment, anytime you need to know. 

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]]>Thu, 07 May 2026 10:44:57 -0400<![CDATA[Relocating An Existing Tenant]]>https://www.charlottenccommercial.com/blogs/post/Relocating-An-Existing-Tenant

Relocating An Existing Tenant

A landlord’s standard lease usually contains a clause requiring a tenant to move to another space in a commercial building or shopping center. A new tenant that is negotiating for space in the building might be surprised to see the clause before signing the lease, wondering about the reasons for it.


The owner or manager will seldom require any tenant to move to another space because it can be expensive for both the owner and the tenant. The clause must be in the lease, however, as the owner has to be able to manage space efficiently.


This clause can require the tenant to move to other space in a building (or even to another adjacent one) on appropriate notice from the landlord at any time during the lease term. The usual reason to relocate a tenant is to consolidate scattered vacant space in a building to provide a large block of space for an existing or single incoming tenant.


If the commercial building is a shopping center, a first class tenant (in the sense of its ability to generate shopping traffic) might choose a certain location. The landlord might relocate existing tenants because that relocation will benefit every tenant in the center.


Objection To Relocation
The objections by a tenant can be obvious. The proposed new space is not as desirable. Goodwill might be lost by the tenant. The move will cause confusion within the business. A retail business can lose sales during the move. However, only the largest and strongest tenants will be able to eliminate the clause in the lease. These are the tenants least likely to be relocated anyway.


For the smaller tenant, the goal should be to ensure that the clause, if exercised, can not be done arbitrarily or at any cost to the tenant.

Conditions In The Lease

Here are some conditions that would normally be in the relocation provision:

Advance notice. A tenant should get notice of the relocation with a right to access the new space in plenty of time before the moving date to get the new location ready for his occupancy.

  • Reason for the move. The relocation should be for a definite cause and only in cases specified in the lease. Example: The incoming tenant that will be using the tenant’s old space will occupy a certain percentage of the property or a certain square footage. In this negotiation, the landlord may object to specific statements as this could limit his options.
  • The new location. The proposed new location should be specified, when possible.          Example: Same building or another specified building, specific floors. The square footage should be the same with minor variation and the space should be comparable in location, improvements and amenities.
  • Rent adjustment. The landlord will want the tenant to pay the same rent per square foot. The tenant may argue that the rent should be based on square footage only with lesser rent for a smaller space.
  • Moving costs. The landlord should agree to pay for all costs of the move, including moving expenses, painting and remodeling, so the space is comparable to the original space.
  • Frequency of relocation. Only one relocation should be allowed in one lease term. In a long lease, no more than once in a specified number of years. If the relocation occurs in a specified number of months before the expiration of the lease, either or both of the parties can have the option to terminate the lease. If the landlord terminates, he may agree to pay the tenant a specified cash payment.

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]]>Thu, 07 May 2026 10:44:06 -0400<![CDATA[Student Housing Solutions]]>https://www.charlottenccommercial.com/blogs/post/student-housing-solutions

Student Housing Solutions

When an owner has an apartment property near the campus of a University and they mainly rent apartments for student housing, there are particular problems. The competitive situation dictates that leases be offered for one semester of nine and a half months. A twelve-month lease for students is virtually unheard of. That means there are lots of vacancies as soon as final exams have ended. (This does not apply to a few University communities where there is always an apartment shortage. In those few places, the student must lease for   12 months or have no lodging.)


There are ways that might help turn the months of vacancies into extra rental income.
First, during graduation week, the vacant apartments are rented to parents and guests, by the management company, on 3-day or 5-day leases. The parents like being closer to the activities and a close place to rent is more attractive than an outlying motel or hotel.
Second, summer students taking courses at the university welcome the chance to rent an apartment on a week-to-week basis. This is particularly true of students and employees from other colleges who don’t have the time to search out living arrangements for, say, a six-week summer course.

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]]>Wed, 01 Apr 2026 13:16:00 -0500<![CDATA[The Importance Of A New Tenant Screening Process]]>https://www.charlottenccommercial.com/blogs/post/the-importance-of-a-new-tenant-screening-process

The Importance Of A New Tenant Screening Process

The property manager provides the tenant applicant with the lease application that must be filled out for the interview. A leasing agent may assist during the review process, but the final selection of tenants is ultimately the property manager and owner’s responsibility.


All leasing personnel should be informed that the company does not discriminate on the basis of an applicant’s race, sex, color, creed, or national origin.

The screening process helps determine the prospect’s desirability and verifies financial and nonfinancial qualifications. When all information has been received, the applicant’s file should be given to the property manager and/or owner for final review. Decisions made during this process are based on the following criteria:

    • Impressions created by the prospect when interviewed;
    • The prospect’s employment history if the prospect is applying for residential space; company or business history if the prospect is applying for commercial space;
    • Information gathered from verifying the prospect’s references and from the completion of a credit check;
    • Compatibility of the tenant to the property type.

When the application is approved, the property manager should prepare the lease and other appropriate documents that require the applicant’s signature. Commercial tenants will probably have an attorney review the lease, which may require a certain amount of negotiation. Upon approval, the lease is signed, and security deposits and rent payments are collected as specified in the lease.

When an applicant is disapproved, he/she should be promptly notified. If the disqualification resulted from a credit check, the law requires that the applicant be informed of this. To protect against possible litigation, rejected applications should be kept on file with complete statements about why applications were rejected.

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]]>Wed, 01 Apr 2026 13:14:00 -0500<![CDATA[“Purpose And Use” Within A Shopping Center]]>https://www.charlottenccommercial.com/blogs/post/purpose-and-use-within-a-shopping-center

“Purpose And Use” Within A Shopping Center

In Recent years, many stores have widened their lines and no longer specialize in only one form of merchandise. Such operations as supermarkets may sell anything from CDs and DVDs to refrigerators, and drugstores are as apt to carry pots and pans as well as pills. However, in order to insure the success of small as well as large store operations within the shopping center, management specialists must try to create a harmonious balance and limit the amount of “overlapping merchandise” that causes unnecessary competition. Big Box stores sell almost everything but are usually a “stand-alone” store.

One approach is to regulate the retail character of the center through “purpose and use” clauses in leases.

This is one of the most important provisions in a shopping center store lease. Since the lease term will run anywhere from 10 to 30 years, the tenant will try for a provision that will permit him to make the broadest possible use of the premises. The owner or developer, on the other hand, will be thinking of the welfare of the entire center, and he will want to define and limit the business use of each tenant as to the line of merchandise it will sell. He will also want a provision that controls the kind of products sold and even the price range of the merchandise. In setting up so-called “use” clauses, don’t characterize the business merely as a “shoe store” or a “TV store”. Instead, set forth the nature of the business in more detail.

The purpose of regulating competition within a shopping center is to establish a proper balance between too much and too little competition within the center. One of the basic attractions of a well-planned shopping center is the potential increase in the business of each tenant because of the proximity of other tenants whose operations are successful. Each tenant wants to be assured that the other stores will be occupied by tenants whose businesses will complement and benefit his business rather than engage in destructive competition with his business.

An exclusive right clause gives the tenant the exclusive right to engage in a specified business or sell a particular line of merchandise within the center or a particular portion of the center. The trend is against exclusives, either for the type of store or for a specific line of merchandise. The reasons for this trend are not hard to find: a large number of shoppers like to do comparison shopping and modern merchandising methods have led many stores to broaden their lines so that a great deal of overlapping results. In most instances shopping center developers should insist that, if they grant an exclusive, the exclusive be limited to the main line of business of the tenant as specified in the use clause in the lease. With this type of provision, merchandise sold by the tenant as an incidental line of merchandise doesn’t come within the purview of the exclusive and may be sold by other tenants in the shopping center.
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]]>Sun, 01 Feb 2026 13:18:00 -0500<![CDATA[The CPI Escalation Rental Clause]]>https://www.charlottenccommercial.com/blogs/post/the-cpi-escalation-rental-clause

The CPI Escalation Rental Clause

Putting a CPI (Consumer Price Index) escalation clause in a lease is to make the lease fair to both the tenant and the property owner.
A primary benefit of escalation clauses is they help protect against diminishing purchasing power related to inflation. The CPI measures monthly the average change in the prices consumers pay for certain goods and services such as oil and gas, healthcare, food, and housing.


Commercial leases commonly provide that while rents will follow the CPI upward, they will remain the same when the CPI goes down. Landlords will argue that this is necessary because the CPI rarely declines and the one-way provision is necessary in leases when the owner obtains financing.


CPI clauses operate in one of two ways in the calculation of annual changes. Most common in use is the “yearly method”. At the end of the year, the rent is increased by the amount of the increase in the CPI in the previous year. So, the rent each year is raised to a new level and this is the basis for the next year’s adjustment.
The other method is the “cumulative method.” Using this, the initial rent (at lease commencement) is increased each year by the change in the CPI between the beginning of the lease term and the current year. In other words, each CPI adjustment reflects the cumulative CPI increase since the beginning of the lease term.


When the CPI rises steadily throughout the lease term, both methods yield the same results. However, if the CPI declines in a year and then increases in the following year, and if the lease contains a one-way provision, the cumulative method favors the tenant. This is because using the cumulative change in the CPI means that declines are included as well as increases in the total. By comparison, under the yearly method, the tenant loses the benefit of a year in which the CPI has declined.

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]]>Mon, 01 Dec 2025 13:58:00 -0500<![CDATA[The Success Of A Prospective Tenant]]>https://www.charlottenccommercial.com/blogs/post/the-success-of-a-prospective-tenant
In this issue
  • The Success Of A Prospective Tenant
Owners must think about vacancies when checking a prospective tenant. Will the tenant’s business survive? When you have a prospective tenant for a commercial center, you must consider whether that prospect would be a good tenant. There are two key standards to apply; (1) the prospective tenant’s financial stability; and (2) the prospective tenant’s potential for success.....(more)
  • Lenders, Property Managers – A Service Joint Venture
Whether times are good or bad, lenders always have foreclosed properties in inventory. During a recession the inventory may be high. One of the problems that banks and insurance companies have is disposing of this real estate owned (REO). They are faced with the decision of whether they wish to dispose of the property immediately or hold it for a period of time to hope for an increase in value. They would like to see the value of the REO increase to equal the loan amount. These lenders are not professional real estate investors but money managers. Therefore, they are reluctant to invest any additional money in the properties. This problem is compounded because a troubled property needs more attention than does a healthy one. It would not have been in foreclosure if it didn’t need help. The solution might be a service joint venture. This type of contract with a real estate firm allows the lender to minimize management fees until the property is generating cash flow again.....(more)
  • Rental Market For Senior Lifestyle
Not all retired people want to own their own home. Many prefer to be tenants. Many feel that the proceeds from the sale of their old home can be used to supplement their pension and social security, rather than reinvested in another home. The money can be used for travel, visits to children and grandchildren or for medical expenses. For living quarters, these seniors prefer to be rent payers, not owners. A modest-sized apartment suits their needs and, as tenants, they are relieved of any worries about maintenance and repairs......(more)
  • Variations of Commercial Leases
A lease is an integral part of many real estate investments. It should outline all the obligations of the tenant and of the landlord. This sounds simple, but many questions arise. If, for example, property taxes increase, does the tenant pay all of the increase or only part of it? If the property must be modernized, who pays for the improvement? Can the tenant be moved out during the renovation? If the costs of servicing the property rise, should the tenant pay none, all, or part of the increased costs? How should inflation be handled—with automatic rental increases? With increases tied to some index, perhaps the Consumer Price Index?....(more)
  • Investment Planning
    • A prospective investor may have a problem getting started with a real estate investment because of the great variety of properties that are out there. They may be fearful that someone will “sell” them something - something that is wrong for them. An answer to these problems can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them. (more)
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