Understanding the Good Guy Clause and NYC Office Leases

Inviting workspaces

Do you have questions about the Good Guy Clause? The GGC is an important part of Manhattan commercial lease negotiations.

Thomas Murtha, Partner at Capstone Realty, defines the GGC in informative detail and discusses how it can benefit both the tenant and the landlord.

What is the Good Guy Clause?

The purpose of the Good Guy Clause (GGC) is to help landlords avoid a lengthy and costly eviction process in the event that a tenant has ceased to pay rent, and to help tenants limit the amount of security deposit. The GGC is also known as “Good Guy Guarantee,” “Limited Personal Guarantee,” or simply “Guarantee.”

Although the language will vary from one GGC to another, the following requirements are typically found therein:

  1. Tenant must give notification to the landlord (notification period varies – typically three to six months)
  2. Tenant must deliver keys of the demised premises to the landlord or managing agent and surrender the demised premises to the landlord in broom clean condition and free of all subleases or licensees.
  3. Tenant must be up to date with all amounts due and payable under the lease as base rent or additional rent or other such charges.

THE SPIRIT OF THE GOOD GUY CLAUSE

The spirit of the Good Guy Clause is a Personal Guaranty from either the principal or officer of the corporate entity that signs the lease, thereby making him/her personally liable for the rent while the corporate entity occupies the space. In the event the tenant ceases to pay rent, for whatever reason, the tenant will be a “good guy” and will vacate the premises, effectively ending the personal liability.

The majority of landlords in Manhattan require a Good Guy Clause to be signed and will typically perform a credit check on the individual(s) that intends to sign the clause. The most important thing to do prior to signing the GGC is to make sure there is no “long tail” attached to it. Tenants must ensure that the Personal Guaranty terminates as soon as the demised premises are surrendered / returned to the landlord. Tenants also must be hyperaware of the notice period required to activate the rights of the GGC. For instance, some landlords will require that tenants give six months’ notice prior to exercising the Good Guy Clause. As a tenant, you ideally want to trim this notice period down to three months or less.

IN THE EVENT YOU DECIDE TO SELL YOUR BUSINESS

It is also important to ask for language to be inserted into the Good Guy Clause in the event you decide to sell your business. It seems the majority of business owners that I work with do not have an exit strategy in place with regards to the lease or an intention to sell their business any time soon, however, it is important to have the proper lease and GGC language in place in case the long term goals of the company change. Most landlords are fine with inserting language that states tenants have the right to transfer the Good Guy Clause to another individual of the same financial strength in the event the business is sold.

A majority of the office leases in Manhattan contain a Good Guy Clause.

WHEN THE GOOD GUY CLAUSE IS NOT SIGNED

In the instances where a Good Guy Clause is not signed:

  1. The principal of the corporate entity is not a U.S. citizen.
  2. The company is publically traded.
  3. The landlord does not require a GGC to be signed.
  4. The principal absolutely refused to sign the GGC, and in exchange, a higher security deposit is the result.

If you have questions about the GGC and the commercial real estate industry, then just ask us. Thomas Murtha will answer any questions that you may have. You can visit the GGC website and submit your inquiries.

http://goodguyclause.com/

View Beautiful Showroom Spaces in Manhattan

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Capstone Realty Advisors announces the launch of its new showroom website at http://www.nycshowroomspace.com/

If you are looking for a showroom, we will help you find a space that matches the creative vision of your business.

These showrooms offer you many advantages, including:

  • Prime locations in Manhattan
  • Creative and inspiring environments
  • Abundant natural light
  • Skylights, exposed brick, hardwood floors, high-end glass partitions, and lighting fixtures
  • Fall within your budget guidelines
  • Favorable lease terms that fall within your growth or exit strategy

To find your showroom, please contact us today for a free consultation with one of our agents.

For more information, please contact us at:

Joe McLaughlin

Tel: 212-239-8400

Email: jmclaughlin@capstoneny.com

Peter Gordon

Tel: 917.243.4228

Email: pgordon@capstoneny.com

To view some beautiful showroom spaces, please visit our website at:

http://www.nycshowroomspace.com/

Showing an Office Space Through Photos and Images

Photos grab attention and words sustain it

In commercial real estate, is a picture really worth a thousand words? When you want to sell or lease an office space, there are many reasons why you should capture the office through the lens.

Since people are visual creatures, images can be powerful – they evoke a certain emotion or mood within us. They also allow us to make sense of something and to understand it in a way that words can’t describe. Studies have proven that even color can arouse emotion and cause people to respond in certain ways. It’s no surprise that the body and mind are inextricably linked.

Photos also lend credibility and value to your claims. For instance, they provide evidence that the office is sun drenched, with tremendous views and gleaming hardwood floors. Ultimately, that’s what you want: for people to believe what you say. Clever catchphrases are a moot point without the supporting evidence.

Since photos clearly are the sustenance of commercial real estate, here are some tips on how to best represent and showcase your office space.

Take Wide-Angle Shots

Wide angle shots are the best way to feature open space in an office. For some industries, open space is the holy grail of office design. Many creative businesses are opting for open layouts to encourage collaboration and the exchange of ideas. A wide angle shot can really do justice to wide open space.

Emphasize Ceiling Height

Many business owners covet high ceilings in an office. To emphasize the ceiling’s height, hold the camera vertically when taking the photo. Doing so will give the viewer an accurate perspective of those lofty ceilings.

Feature the Building’s Exterior and Neighborhood

If an office is in an attractive or architecturally-unique building, why not make that a focus? I always appreciate when listings feature photos of the building’s amenities or even the neighborhood itself. Such photos can really give you a better idea of what it would be like to work there.

Don’t Forget the Office Views

Think “outside of the office” and look out the windows. Do you see an expanse of cityscape? Perhaps, there’s a landmark building just a stone’s throw away. Capture a shot of the views if they are pleasing to the eye. People enjoy working next to a backdrop of inspiring views. A glance at that picturesque scene can be motivating after hours of staring at a computer screen.

Take Panoramic Shots

The panorama feature is a blessing to real estate photography. Panoramas are relatively simple to create. Just take a few photos and combine them by using a basic stitching program. Panoramic shots add flair to a listing and give an alluring, three-dimensional appearance to an image. They draw in the viewer, making them feel as if they’re looking at the office space itself.

Use Strategy

Before you even begin to snap the camera button, take a mental snapshot first. Ask yourself which qualities you want to emphasize. Will it be its natural light, large windows, or long wall of exposed brick? Focus on its assets and keep in mind that you want your photos to leave an impression.

When I take photos of commercial real estate, it’s a unique experience every time. Each space has its own character and ambiance. Plus, there’s something satisfying about seeing an office space displayed in resplendent detail through photos.

Are you an office space shutterbug? Please share your own tips and suggestions with us by leaving a comment below.

Questions to Ask Before You Hire a Commercial Real Estate Agent

Photo Courtesy of PhotoPinBusiness owners who are looking for office space, this post will help you with your search. Perhaps, you are now looking for a commercial real estate agent, and have hopped online to see what options the search engines will churn up for you. You type in commercial real estate agent, your location, and voila – a long list of commercial real estate agents appears before you.

So, where should you begin? How do you narrow down these options to find the commercial real estate agent who will be best for your business? After all, you want to find an agent who will make the process as seamless as possible.

Fortunately, there are many resources to help you during your search. There are well-known commercial real estate websites that deliver quality advice. They even offer real estate search engines to fine-tune your search. Just simply type in your requirements and allow the search engines to work their magic.

However, one of the best ways to find a commercial real estate agent is through word of mouth and referrals. Ask your fellow business associates who they used for their commercial real estate agent. Testimonials from trusted sources can provide invaluable insight and perspective.

Now, it’s time to narrow down these options even further to find the top candidate. Do some detective’s work by asking the agents several key questions.

Here are some important questions to ask:

How many years have you been a commercial real estate agent?

Naturally, you may want to hire a seasoned real estate agent who knows the ins and outs of the industry. Experienced agents have weathered the commercial real estate market’s ups and downs, and have proven their resilience.

Even though experienced agents certainly have an allure, don’t turn away an agent who is just getting their feet wet. You could benefit from a new commercial real estate agent’s keen and enthusiastic approach, and who hits the ground running.

Do you specialize in a particular industry?

Find a commercial real estate agent who specializes in your business’s industry. For instance, does your business sell computer hardware? If so, then, an agent who works for clients in the tech industry would be right for your business.

Tell me about the most memorable deal that you have closed.

Every commercial real estate agent has those deals that become defining moments in their careers. Ask why this particular deal resonates with them.

What sets you apart from other commercial real estate agents?

The effective commercial real estate agent has a promise, a shtick that sets them apart from the rest. Find out what defining quality they will bring forth to the table (so to speak). Will it be their experience and long-standing track record of proven results? Or, their boutique approach of working with you one-on-one? An agent should bring you their own unique professional style and approach.

Do you have an updated license?

Practicing commercial real estate agents are required to have a license from the real estate branch of their state’s Department of Licensing services. They must also routinely renew their license to keep their knowledge fresh.

Can you tell me more about the neighborhoods you represent?

Your commercial real estate agent should give you the lowdown on the neighborhoods that they represent. Forget about the guidebooks; your agent will loop you in on what’s hot in the area, from the main attractions to the hidden delights.

What are the current trends in the commercial real estate market?

The way the commercial real estate agent answers this question will clue you in on whether they keep informed. The successful commercial real estate agent consistently researches and combs the news. They are plugged into the pulse of the commercial real estate market, and leverage their knowledge on your behalf.

You and your commercial real estate agent will forge a business partnership. The above questions will help you find the agent who pulls out all the stops for their clients – someone who will work for, and with, you to find the best office for your business.

How to Succeed as a Commercial Real Estate Agent

As a burgeoning commercial real estate agent, you might wonder what it takes to become a successful commercial real estate agent. How does one become a leader and go-to source in the industry?

The honeymoon stage of your real estate career is a crucial one, laying the groundwork for your future in the industry. Not only will you learn the nuts and bolts of commercial real estate, but you will also develop your own unique professional style. It’s a time to experiment and to hone your technique, to see what works for you and what doesn’t.

There is no magic formula that guarantees success in commercial real estate. However, the successful real estate agent demonstrates specific qualities that set them apart from their peers.

Honesty and integrity

First and foremost, a successful commercial real estate agent has integrity. Rightfully, clients want an agent whom they can trust. They want to know that their agent will be working for and with them. A commercial real estate agent must always approach their job with an unwavering code of business ethics and professionalism. In fact, honesty and integrity should be a given for every agent, not just successful agents.

Proactive and knowledgeable

The successful commercial real estate agent is proactive. They realize that listings come and go, and act fast to navigate the ever-shifting market. Furthermore, they are experts within their niche. They consistently comb the news to keep informed about inventory, industry trends, and market forecasts. If their clients have questions, they have the answers.

Proficient with technology

When a client searches for a commercial real estate agent, they usually begin with the Internet to scope out the options. The successful real estate agent realizes this and harnesses the power of the Internet to showcase their services. They effectively use media to clearly communicate how they can help prospective clients.

Mobile technology is also seeing a rapid rise in commercial real estate. People are now using their phones to conduct online searches, access listings, and to communicate. With the world becoming an ever mobile place, the cell phone is taking center stage in commercial real estate.

Knows the neighborhood they represent

When a business owner searches for an office space, they are also looking for a neighborhood that will allow their business to thrive. Certain neighborhoods tend to attract certain industries. For instance, the Midtown South area of New York City is a mecca for creative businesses. Meanwhile, businesses in the financial services industry gravitate towards Wall Street, appropriately dubbed the Financial District.

As a commercial real estate agent, you should become familiar with the neighborhood(s) that you represent. Check out the surrounding attractions, happy-hour hangouts, and travel accommodations.  If you prove yourself as a community expert, your clients will appreciate your authority on the area.

Additionally, it’s important to form a strong, supportive anchor of contacts in your community. In a professional network, every contact counts. By networking effectively, you will establish your credibility in the commercial real estate industry and even get referrals to your services.

Never complacent

Lastly, the successful real estate agent understands that their career is always a work in progress. Even at the pinnacle of their career, they never become complacent. Momentum in commercial real estate depends upon your own mindset. If you always try to improve, you will move forward in your commercial real estate career.

How to Become a Commercial Real Estate Agent in NYC

Photo Courtesy of Online Real Estate MarketingDo you want to become a commercial real estate agent in New York City? Perhaps, you’re a recent college graduate looking for your career niche, or you’re considering a change in career. Whether you’re a fledging or a veteran in the job market, commercial real estate can be an exciting career choice. Here, I deliver the whys and hows of becoming a commercial real estate agent in NYC.

Why Become a Commercial Real Estate Agent?

It’s an exciting and dynamic career. If you like to constantly be in “on” mode, then you will enjoy being a commercial real estate agent. Some days, you will be at your desk, corresponding with clients through email and phone, conducting industry research, and performing administrative tasks. Other days, you will find yourself out and about in the city – showing office space, meeting with prospective clients in person, or attending meetings and conferences. In this career, no two days are exactly the same.

You will make connections. Your ability to network and forge quality working relationships is crucial to your success as an agent. To become a standout in the industry, you must spread the word about your services and build your business brand. On any given day, you will interact with many people and will steadily become socially connected to the nation’s premier business hub.

Flexible schedule. A commercial real estate agent’s hours do not adhere to the standard 9am – 5pm workday. Rather, your schedule depends upon the needs of your clients. For those who are less than enthusiastic about a structured workday, this can be an appealing aspect of the job. However, the successful commercial real estate agent will put in long hours and be attentive toward their clients. A strong work ethic and drive go a long way toward success in commercial real estate.

Reap the rewards of your own efforts. Your own efforts will guide your commercial real estate career. Of course, there are other forces at play, such as prevailing market trends, but it’s your skills and finesse that hold the most weight. Your own actions on the job will determine whether you make it or break it in the industry.

How to Become a NYC Commercial Real Estate Agent

Get Your Commercial Real Estate license. To become a commercial real estate agent in the New York State, you must be at least 18 years old. Even though you do not need a college degree to become an agent, a college education can give you an advantage in this dynamic industry. For instance, many commercial real estate agents hold degrees in business, marketing, psychology, finance, and related fields. Since an agent wears many hats on the job, you can apply the skills you learn in college toward your career.

To get your commercial real estate license, you must complete at least 75-hours of course instruction. Upon completing the courses, you are required to take a NY state-mandated exam. Keep in mind that your real estate education does not end there. Every couple years, you must renew your commercial real estate license by passing the state-administered renewal exam. Renewing your license keeps your knowledge fresh and sharp.

For a helpful guide on how to get your commercial real estate license, visit the Department of State, Department of Licensing Services website

Find a Commercial Real Estate Brokerage. This is the most important step to becoming a commercial real estate agent in NYC. The brokerage you choose will have a lasting impact on your career. Your colleagues will be your cohorts, since you will work closely with them as a team.

To find the commercial real estate brokerage that’s right for you, do some research. New York City is a hotspot for commercial real estate, and there are many job opportunities. To narrow down your options, ask yourself the following questions:

  1. Do I want to work at a boutique, mid-sized, or large firm? 
  2. What will be my specialty – the tech, fashion, scientific, creative, or manufacturing industries?
  3. Do I want to represent tenants or landlords?
  4. Which NYC borough(s) do I want to serve?

Knowing the answers to the above questions will make you a competitive applicant in the hiring process. Commercial real estate brokerages are looking for proactive people who have done their research and know what they want in their careers.

Complete a commercial real estate training program. You should choose a commercial estate brokerage that offers a training program to its newcomers who are new to the industry. The training program will be an apprenticeship of sorts, as you learn the ropes and mechanics of the business. During the training program, a seasoned real estate agent will take you under their wing and train you. It’s a very hands-on approach to learning, one that will give you some invaluable skills and career insight.

Being a NYC commercial real estate agent can be very rewarding. You will get to be a part of the nation’s premier business capital. If you follow these steps, you will be well-prepared to survive and thrive as a commercial real estate agent in NYC.

Capstone Realty News | View an Inspiring Loft Sublease

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This inspiring loft sublease, located in the heart of SoHo, is a rare find for the creative tenant. Professionally designed by Benjamin Noriega-Ortiz, its built interior features a diverse arrangement of open area, conference rooms, and private offices. The entire floor showcases high-end fixtures throughout and resplendent natural light.

For more information about this creative loft sublease, please contact:

Jarad Winter | 646.443.8568

JWinter@capstoneny.com

View the flyer below for additional details and floor plan:

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