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“My Rent Is Low. That’s Great News – Or Is It?”

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Dear El Cardinale’,

I’ve been talking to other executives whose companies lease space in the same building where I do. From what I’m hearing, I’m paying cheap rent compared to others. That’s great news, isn’t it? Or is there something I don’t know that I should be worried about?

– Sitting in the Catbird Seat

Dear Catbird Seater,

Congrats, for now. It might feel like you are in an enviable place, but my friend, I’m here to tell you, that one day things won’t be feeling so pretty.

You see, there is a landlord in the shadows nearby who is waiting for your renewal and he is ready to pounce. That cat with the Cheshire grin has been quietly pushing rents with every new tenant, and every lease renewal proposal he sends out. And the result is a record of rent inflation in all of the top 100 office and industrial markets across the US.

You see, he bought the property recently and paid a lot for it. The only way he will make any profit is to push rent. He and his partners bought the property assuming you will pay “market rents.” I can empathize with him – we are both cat-polist. (Capitalists, get it?)

Okay – enough of the puns.

If you signed a long-term lease five, seven or ten years ago, you may find yourself in a bind when your lease rolls. How so, you may wonder. It’s because when it is time to renew, and with market rates moving up dramatically since the recession, you will need to be prepared for a huge jump in rent.

For example, in 2018, Charlotte had the fastest industrial rent growth in the country – a whopping 8.3%, according to CoStar. Charlotte is not alone, across the nation industrial rents have escalated year after year over the past decade. Office rents have also increased, but not like industrial – with one exception. Class A office rents in the CBD have gone through the roof. If you were the first tenant in a new building five years ago, expect your landlord to provide you a renewal proposal 2%-9% above your current rent.

It’s important to understand the market with a long view. Be sure during renewal time that you are armed with the latest market stats and have a skilled negotiator by your side – it will help you soften the blow of any rent increase.

If you want to know what your others in your building are paying in rent, or if you want a report projecting what your lease renewal lease terms will look like, shoot me an email.

Real estate transactions can be fraught with frustration and pitfalls.

Sometimes the hardest part turns out to be working with your broker, the person who is supposed to help you through the complexities. Veteran commercial real estate broker and client advisor John Culbertson discovered that brokers’ interests aren’t always aligned with those of their clients. He realized there was a better way to advocate for clients and get the deal done.

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We’re grateful for our clients. They are extraordinary leaders who have achieved tremendous results. When we think about the companies and people we are fortunate to work with, we are blown away.

Jay Faison
Former President, WirePath and ZoboTV

John and his team were exceptional advocates on our behalf. Their team approach makes sense, and it yielded an excellent value for my company.

Bob Spencer
Senior Vice President, RBC Bank

I got to know John while serving on a state board and observed him be one of very high integrity and commitment to his clients. His approach to serving clients in the real estate business is unique and results-focused. I have no hesitation recommending him to any of my clients. I know he is a true professional and an expert in his field. He understands partnering like no one else!

Lee Roberts
Former Managing Director Piedmont Community Bank Holdings

Truth is, we can easily find real estate that is available in SouthPark. But Cardinal called the landlord of one of our competitors and helped us make a deal for an awesome Charlotte branch. I am extraordinarily pleased with the engagement in every possible dimension.

Ronnie Bryant
Former CEO, Charlotte Regional Partnership

Working with a smaller shop gets you more personal attention. I got the top guy’s attention. You don’t get that with a large organization where sometimes you end up with junior people doing the work. John is detailed; he’s professional, he’s aggressive, and not in a negative way, but in terms of wanting to get it right. He’s tenacious. He would be my No. 1 choice for any real estate deal. I know what to expect. He’s a good guy, and over the years, he's become a good friend, too.

Stephen Pandos
Director of Finance, Insite Properties

Few people have a Rolodex like John. He's about the most networked person I know and people take his call. He has deep contacts with all the major players, both locally and around the region. As a result of John's introductions, we have found several exceptional deals and developed some valuable relationships. You can't put a price tag on this type of access and speed of trust.

Stephen Pandos
Director of Finance, Insite Properties

John has a high tolerance for the mental pain it takes to solve a complex problem. Frankly, his peers in the brokerage industry just don’t have it. I think John’s experience as an operator, investor, developer, and broker gives him a unique perspective when looking at opportunities. His vision, his ability to think forward, is unique in his profession. His ability to see the bigger picture and what the future looks like on opportunities is remarkable. He also is networked - he has deep contacts with all the major players, both locally and around the region. John’s network has opened doors for us. People take his call.

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