FIRST, WHAT IS HAPPENING IN THE COMMERCIAL DISTRICT OF CARMEL-BY-THE-SEA?
Just heard another retailer who tried to get an extension of her commercial lease in Carmel-by-the-Sea, but the landlord was only willing to give a month-to-month lease.
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There are several reasons why landlords don't want to give longer leases right now, even to those who have been excellent tenants:
1. A lot of shorter leases were signed during the downturn of the market just to get spaces filled. Naturally, the leases were very advantageous to the tenant.
2. Quite a few buildings changed ownership recently with a high price tag. These new owners are looking for tenants with deeper pockets.
3. Several buildings will be going through major renovations during which current tenants will be moved out. Whether they get back in is questionable.
4. There were quite a few empty commercial spaces until a few months ago, but not so any more. Many have been leased by Central California vineyards for their wine tasting rooms.
YOU SEE WHY, IF YOU HAVE A MONTH-TO-MONTH LEASE:
1. You have no bargaining power with the landlord. If he wants you out, you are out.
2. If you have had an excellent location which you negotiated during the downturn of the market, you won't find an equal or better location now. Commercial space has tightened considerably.
3. If you have built a business in a certain location and want to sell the business, the new owners would need to negotiate a new lease. And in this market, that may not even be possible or be very expensive to a buyer-prospect. In any case, the current business owner may not see much return on his investment by selling.
I've been in Carmel-by-the-Sea since 1995 and have seen major changes in the market, good and bad. If you are considering leasing a commercial space here, I will be happy to represent you in negotiating the best lease possible in a location that makes sense for you.
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