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GMAC Real Estate
Tenant Alert
In This Issue:
Looking for the
lowest rents in Manhattan?
Looking for a rent bargain? Manhattan now offers a range of office
space rents-even in prestigious neighborhoods.
Click here for the
latest rents, by neighborhood!
This market offers rich opportunities for:
- Firms
with leases expiring in the near future,
- Companies
that need to obtain additional space now, or
- Those
that wish to downsize.
Some
areas of Manhattan are experiencing different effects of supply and
demand for office space, and tenants may obtain a better lease package
in particular areas. Some landlords in Manhattan are providing more
concessions than others. To find the best deal, talk to the experts in
the know-GMAC Real Estate professionals.
GMAC Real Estate delivers premier service to its customers by providing
reliable, usable statistical information, as well as data-in-the-field.
For more information, contact George F. Donohue,
president of GMAC Real Estate, at (212) 620-2611 or via email.
Executive View -
Why use a real estate expert?
"Knowledge is power" translates into success
across all businesses. Executives who run their business know how to
manage it the best. However, these management experts may not be as
familiar with real estate since one usually negotiates an office or
retail lease only once every five to 10 years.
Often, executives do not consider the real estate aspect of their
business when charting corporate strategies. In fact, most companies
ignore the issue of real estate-until they find themselves with only
two or three months to lease a space or make a purchase. Only then does
the frantic and somewhat haphazard search for a real estate expert
begin.
Major decisions concerning the future of a business require the skill
of an expert, and real estate is no exception. For this reason,
executives should perform due diligence by researching real estate
specialists-just as they would before hiring a doctor or lawyer.
A real estate expert will filter out the sensationalism and hype with
which the industry has become increasingly associated. Instead of
simply scratching the surface of a proposed transaction, an experienced
real estate advisor can explain related expenses, hidden costs and
trends that have a significant bottom-line impact. This industry expert
provides companies with all the essential information that management
needs to make a sound decision-a common practice in virtually every
other aspect of a firm's operations.
Professional realtors go beyond the fundamental data. They delve into
the factors driving the transaction and tailor strategies for business
owners that align with company objectives. Obtaining the best
information in a timely manner eliminates careless decision making that
can ultimately hurt a business.
For more information, contact George F. Donohue,
president of GMAC Real Estate, at (212) 620-2611 or via email.
Jargon -
Attorn/Attornment
"Attorn" means to consent to a transfer of a right. "Attornment"
typically describes a situation in which a new landlord accepts an
existing tenant, allowing the leasing party to stay on location after
sale of the property.
Attornment Agreement
In the event of a sub-lease arrangement, securing an attornment
agreement at the time of signing protects the subtenant in the event of
the tenant's default.
Under such an agreement, the owner provides notice to the subtenant if
the tenant defaults. The subtenant then has an opportunity to cure the
default and take over the lease.
The agreement may also call for the owner to assume the role of the
tenant and to allow the subtenant to continue occupancy under the same
conditions as before the default.
Financing -
Securing the best construction loan
Unlike mortgages, construction loans require
borrowers to tell a story. What kind of property and improvements will
the loan be used for? And what is the plan for recouping the
construction loan?
Another difference between mortgages and construction loans lies in the
fact that the latter is a short-term loan. Construction loans only
apply for the length of the construction or renovation-not the full
term of ownership. Borrowers typically pay interest only during the
loan period, with the principal due in full upon loan expiration. As a
result, borrowers have to consider inevitable construction delays
during the application process.
Telling the story
The more compelling the story (i.e., the less risk for the lender), the
greater the chance for a favorable rate.
- Loan
use. What kind of property will the loan apply to (e.g., office space,
warehouse, retail building, etc.)? Does the project involve new
construction or renovation?
- Collateral.
What security can the borrower provide against the loan? Owning the
land on which the construction will take place, for instance, can
secure a lower interest rate.
- Business
plan. A solid business plan can lend credibility to the borrower's
ability to repay the loan.
- Personal
history. Naturally, lenders want to know the usual details: personal
history, employment history and the all-important credit score.
Getting
the right loan
Businesses need to consider several different factors when applying for
a construction loan:
- Competitive
shopping. Different financial institutions have different loan
requirements-and options. Identify the lenders with programs that meet
the project requirements, and obtain an offer from each.
- Total
costs. The lowest interest rate may not always be the best deal.
Borrowers need to study all the terms and conditions.
- Expert
advice. A financial professional can save clients' time and money by
cutting through the clutter and finding the best loan for the proposed
project.
For
more information on financing, contact Christian Deutsch at (212)
620-2619, or via email. Or visit
the RECAP website at www.recapam.com.
GMAC Real
Estate / IPG New York
520 Eighth Avenue
22nd Floor
New York, NY 10018
Phone: 212-620-2611
Fax: 212-265-8751
GMAC Real Estate IPG is an independently
owned & operated firm.
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