47% rent increase, thank you new owners.

[DavidTT111]

Did you sign a new lease then? Usually they will also include options and agreements about how much they can increase your rent each year so you can have some predictability for at least 5 or so years.

Hopefully CA is near the end of it's rising prices, it's getting ridiculous, although I would have thought that 2 years ago also.

 

[Lanso]

Everyone seems to forget: every time the property changes hands, family or otherwise the property value is re-assessed which causes the property tax to rise so that will cause the rent to go up.

 

[triumph406]

Did you sign a new lease then? Usually they will also include options and agreements about how much they can increase your rent each year so you can have some predictability for at least 5 or so years.

Hopefully CA is near the end of it's rising prices, it's getting ridiculous, although I would have thought that 2 years ago also.

My lease ran out end of September. We haven't been offered a new lease of any sort to sign, and I don't think we will be. My assumption is (and it's probably in the original lease from the previous owners) that if a new yearly lease isn't offered we go to a monthly lease with the same conditions. I suspect the biggest reason we're never going to get a yearly lease from the new owners is that being on a monthly basis now they can increase the rent with 30 days notice, rather than waiting to the end of the yearly lease to expire.

The owners intention is to flip the building. as soon as the last lease has expired, apparently their going to paint the building, retarmac the open area and sell the building.

 

[triumph406]

Everyone seems to forget: every time the property changes hands, family or otherwise the property value is re-assessed which causes the property tax to rise so that will cause the rent to go up.

I think the property tax increase is about $100/month/unit.

 

[cmccull166]

Unless your a multi million dollar shop the only asset you have is a building of your own leased to your company.
All the other "assets" depreciate in value.

 

[EmGo]

Here in eu land we might have a chance of redress depending on country.

In China they must allow the current tenant to match the sale price of a property. That seems like a fair deal.

 

[Gordon B. Clarke]

In China they must allow the current tenant to match the sale price of a property. That seems like a fair deal.

You keep forgetting who you are and where you are

 

[pressbrake1]

And you weren't interested in owning the building?

The only way an independent restaurant can survive in New York City is to own the building. If the business is successful, the landlords get greedy.

Why not a co-op, or some other ownership arrangement, with the other owners? Do any of the other tenants come from a tradition of argument? Any tenant a lawyer?

When i first started I rented a barn of a farmer. After 3 months he raised the rent four fold. His reasons were that I obviously made more money than he thought and I had rented a barn not a workshop. He couldn't understand that it was my machines and me paying for three phase that made it into a wshop.

 

[Gordon B. Clarke]

When i first started I rented a barn of a farmer. After 3 months he raised the rent four fold. His reasons were that I obviously made more money than he thought and I had rented a barn not a workshop. He couldn't understand that it was my machines and me paying for three phase that made it into a wshop.

I can easily follow your line of thinking (a greedy farmer) but if the shoe had been on the other foot what would you have done?

I'm also wondering if, after having the price raised fourfold, you still think you got a good deal. I suppose it's a question of "Did you run what you intended doing past him before renting?" and if he'd asked for a higher price then what would you have done?

Being married to a farmers daughter and almost all in her family farmers, I know if farmers don't seize all opportunities to make money nowadays they won't last long as farmers.

 

[pressbrake1]

I can easily follow your line of thinking (a greedy farmer) but if the shoe had been on the other foot what would you have done?

I'm also wondering if, after having the price raised fourfold, you still think you got a good deal. I suppose it's a question of "Did you run what you intended doing past him before renting?" and if he'd asked for a higher price then what would you have done?

Being married to a farmers daughter and almost all in her family farmers, I know if farmers don't seize all opportunities to make money nowadays they won't last long as farmers.

I left, it wasnt a good deal originally just what was available.
He was a nice chap(still a nightmare) but he got his cleaner pregnant who was a horsey girl and she sapped him dry.
Hes had a few black eyes like once when someone who was paying to store a excavator there went to pick it up to find mr farmer had put it out on hire thinking he wouldnt be using it over Christmas ! I came in once to find someone using my iron worker..yes the farmer had rented it out to him as he thought id be on site all day!

 

[72bwhite]

sounds very much like time to look for a different place,
should have a re adjustment in the real estate market in a year or 2 at the most.
or just wait till my brother decides to build a new house half way built the market will
crash.

 

[Miguels244]

Capitalism in the purest sense.
The people with the capital charge what the market will bear.
Eventually enough people will go out of business they will lower the rents.

You own your machines and skills, and charge what the market will bear too.
Eventually you run out of clients and lower prices right?

Not much solace to the working stiffs and people buying your services though.

 

[Mcgyver]

Capitalism in the purest sense.
The people with the capital charge what the market will bear.
Eventually enough people will go out of business they will lower the rents.
.

And what is wrong with that?

Rents will get to an economic level and more buildings will go up, businesses that can't afford a rent that makes it economical to bring new stock online should what, be subsidized? By who, you? You are a landlord and therefore one the people with capital you cite - what do you base your rents on? Market or what the tenant wants to pay?

I know, I know, you rather the "Ministry of Buildings and Worthiness" decide it all

 

[Gordon B. Clarke]

I left, it wasnt a good deal originally just what was available.
He was a nice chap(still a nightmare) but he got his cleaner pregnant who was a horsey girl and she sapped him dry.
Hes had a few black eyes like once when someone who was paying to store a excavator there went to pick it up to find mr farmer had put it out on hire thinking he wouldnt be using it over Christmas ! I came in once to find someone using my iron worker..yes the farmer had rented it out to him as he thought it'd be on site all day!

Sounds like he'd be succesful in the USA

 

[DouglasJRizzo]

If I were you, I'd START LOOKING now. And I would keep looking actively every week. I just went through the same thing in my old building. Owner gave it to his delinquent son who decided he didn't like machine shops and so I had to leave. I was fortunate in that I found a space pretty quickly. The reason why I implore you to move is that if they jacked the rent by that much, they are going to do it again very soon. Most likely, your lease allows for yearly increases and they are going to do it. Reason is simple, they're residential folk, they just clocked a 47% increase and still have tenants. Windfall for them. They'll keep doing it until they squeeze it dry, then wonder why people are leaving. My old building with delinquent landlord is still empty 6 mos after I left. There is a very common activity among landlords to let a space go empty for months, sometimes YEARS, rather than come down one nickle in rent. Again, I'd start looking NOW rather than in panic in another year.

 

[Dumpster_diving]

I feel your pain about the abruptness of the increase. Never pleasant or easy.

But you put yourself in that position by claiming the benefit of preserving your option to move at the expiration of your lease. Claimed that benefit in the past when you had no obligation to remain and claim that benefit in the future if you don't lock in a longer-term lease.

Renting is just a version of temporary ownership of the use of the space for a defined-period. As a commercial tenant you retain rights and obligations for the space. Upside is you're not out the capital to own the building. Downside is you're not in control of what happens when your lease expires. Upside is you're a free agent to move without the financial loss of owning the building at the expiration of the lease. Downside is you don't participate in benefits of building being worth more later if that's what happens in the real estate market.

If you'd like to control the nature and amount of rent going forward, make an owner (yours or the owner of another space) an offer to lease for a defined period of time longer than month-to-month or year-to-year. Choose a term that matches your tolerance for real estate price risk. Or purchase an option to renew at a defined rate as others have suggested.

Either way the risk you take in choosing the term of your lease is you are in control of your risk tolerance that market rents in your area may rise or fall, putting you in or out of the money on what is essentially a bet on future rent levels and thus real estate value. Albeit a mini-bet, relative to the bet the owner takes buying the property fee simple.

When commercial real estate changes hands the value of in-place leases (which value could be negative or positive depending on the rent paid, the duration of the term, and the credit quality of the tenant to honor their obligation) is part of what a new owner assesses when deciding what to pay for the property.

I guess what I'm saying is you're only screwed if you want to think of it that way. If you prefer, think of it as having been in control over your risk tolerance.

 

[riabma77]

My old shop was in Texas, in the most expensive county of the state. I was renting, and rates were sky rocketing year after year. Completely ridiculous.

Las year I moved to a rural area in New Mexico, and I own my building. It's old, but property taxes are cheap.

Most of my customers (US based) are large companies in the automotive and transportation field. All of them are in rural areas, in the middle of nowhere. Obviously they don't care where I'm located.

It seems to me that it doesn't care if you're small of big. The tendency for manufacturing is moving to remote areas. Maybe I'm wrong, but it's what I see from my side.

 

[Larry Dickman]

My old shop was in Texas, in the most expensive county of the state. I was renting, and rates were sky rocketing year after year. Completely ridiculous.

Las year I moved to a rural area in New Mexico, and I own my building. It's old, but property taxes are cheap.

Most of my customers (US based) are large companies in the automotive and transportation field. All of them are in rural areas, in the middle of nowhere. Obviously they don't care where I'm located.

It seems to me that it doesn't care if you're small of big. The tendency for manufacturing is moving to remote areas. Maybe I'm wrong, but it's what I see from my side.

I would move to a rural area in a heartbeat if I could get the power. No 3 phase on the ranch.

 

[Miguels244]

Capitalism in the purest sense.
The people with the capital charge what the market will bear.
Eventually enough people will go out of business they will lower the rents.

You own your machines and skills, and charge what the market will bear too.
Eventually you run out of clients and lower prices right?

Not much solace to the working stiffs and people buying your services though.

And what is wrong with that?

Rents will get to an economic level and more buildings will go up, businesses that can't afford a rent that makes it economical to bring new stock online should what, be subsidized? By who, you? You are a landlord and therefore one the people with capital you cite - what do you base your rents on? Market or what the tenant wants to pay?

I know, I know, you rather the "Ministry of Buildings and Worthiness" decide it all

Try the rest of the quote...context, get some.

 

[72bwhite]

the problem is you get unpredictability once the property flippers get involved.
kind of like the corporate raiders.