69 replies to this topic

[Baro]

I still can't believe they spent all that money to update their sign to a slightly different smaller sign and didn't bother power washing the imprint from the old sign, looks so ghetto.

[Mike K.]

That should be the landlord's responsibility. CIBC pays a hefty fee for signage rights on that building.

[concorde]

^which they would just pass on to the tenants as part of their triple net costs

[Mike K.]

Shouldn't the cleanup fee be part of the signage fee CIBC pays? If the landlord is passing that onto other tenants then it's no wonder so many are jumping ship.

[Koru]

Shouldn't the cleanup fee be part of the signage fee CIBC pays? If the landlord is passing that onto other tenants then it's no wonder so many are jumping ship.

 

Any triple net lease around from A to Z class buildings would have the costs of powerwashing the exterior included in its Additional Rent as part of the operating expenses of the building. Its industry standard North America wide. Only time a landlord would have to pay that is on a gross lease.

[Koru]

I'd be interested to see any examples of block office buildings like this being converted into residences. Wonder how easy it is, how much the look of the building could be changed (patios, window size etc..)

The Qube in Vancouver was converted to residential by Anthem after the office market dried up a couple cycles ago.

[Koru]

Shouldn't the cleanup fee be part of the signage fee CIBC pays? If the landlord is passing that onto other tenants then it's no wonder so many are jumping ship.

And in this case CIBC does not pay hefty signage rates to anyone...they own the building.

[Rob Randall]

It was a lot of effort and expense for what is really a slight logo tweak. And it looks like the sign is smaller because it has to make way for those stupid cell phone antennas. That ghost sign may be there for a while. You can still make out where the Woodwards sign was at Mayfair.

[Mike K.]

CIBC owns the building?

Anyhow, if I as a tenant learned that my landlord was charging me to power wash the imprint of a corporate logo I would not be resigning the lease, and quite frankly I would be disputing the charge. All expenditures are accounted for in the triple net year end details. If they're not tenants can request a detailed break down of costs and many do, especially if the landlord requests an additional amount for an overage.

Everything in a commercial lease is negotiable, everything.

[jonny]

It was a lot of effort and expense for what is really a slight logo tweak. And it looks like the sign is smaller because it has to make way for those stupid cell phone antennas. That ghost sign may be there for a while. You can still make out where the Woodwards sign was at Mayfair.

 

Totally. I chuckle every time I look up and think about the many thousands of dollars CIBC spent on that very slight re brand.

[jonny]

I'm not sure powerwashing would do anything. Isn't it just that the concrete that wasn't behind the logo faded while the bit of concrete that was behind the logo didn't?

[Mike K.]

They should be able to wash that off. The logo that preceded the one that was recently replaced left an imprint that was removed, if memory serves correct.

[Koru]

CIBC owns the building?

Anyhow, if I as a tenant learned that my landlord was charging me to power wash the imprint of a corporate logo I would not be resigning the lease, and quite frankly I would be disputing the charge. All expenditures are accounted for in the triple net year end details. If they're not tenants can request a detailed break down of costs and many do, especially if the landlord requests an additional amount for an overage.

Everything in a commercial lease is negotiable, everything.

Yes they do.

 

I highly doubt the charge would show up as power washing a corporate logo...it would be notated as exterior building maintenance, which under the terms of most office leases is pretty hard to argue against.  Leases are negotiable, especially in the market that Victoria is, however most corporate landlords are not flexible when it comes to what is charged on operating expenses, when you a discussing the terms of your lease I'd say 99% of the individuals doing the lease deals are not concerned over the pennies that an item like that would account for in their overall operating expense proportionate share. And you could certainly challenge it, but the likelihood of winning it is pretty slim, it wouldn't have been worth the fight to begin with. Commercial Office Leases are pretty prescriptive in terms of what is included in operating expenses, short of capital expenses or structural issues its pretty much anything goes... The negotiation is more your face rate, TI's, terms, perks, etc...


 

[Mike K.]

Again, in my experience, if there is an overage for the year and the landlord wants more money for expenses, that's when the looking glass comes out. Nobody bends over when it comes to things like that, especially tenants of large office buildings that have a bottom line to be concerned with. Any overage can be questioned and must be justified by the landlord to the satisfaction of the tenant as they, not the landlord, pay for it.

[Koru]

Again, in my experience, if there is an overage for the year and the landlord wants more money for expenses, that's when the looking glass comes out. Nobody bends over when it comes to things like that, especially tenants of large office buildings that have a bottom line to be concerned with. Any overage can be questioned and must be justified by the landlord to the satisfaction of the tenant as they, not the landlord, pay for it.

 

On large office buildings, the "overage" happens very rarely unless there was something major that changed throughout the year. Items like that would have been accounted for in the 2014 budget and included in Building R&M.

 

Just as an example our firm owns and self manages over 400,000 SF of commercial, residential, retail, and industrial properties in Western Canada. We are usually within the mark by 1%-2% of our projected operating costs every year, and often it winds up being a small refund to the tenants, vs them having to pay us more. And I can also tell you with small overages like that even the national branded tenants do not balk, they just send the money in.

 

If you would get into the pennies like that, I'd suggest one of their property teams hire you, because most of the guys out there are not going to be looking at those items

[Mike K.]

Given your experience in the industry, what's your take on the future of the CIBC tower? I mean it's reaching the end of its life as far as being a prime location for the sorts of businesses that want to be in centralized office towers. With Colliers jumping ship that'll leave quite a bit dent in an already (relatively) poorly leased building.

[Nparker]

...You can still make out where the Woodwards sign was at Mayfair.

This drives me frakkin crazy. I would think after - what is it 20+ years that this has been a Bay (now HUDSON'S BAY) store? - that the entire outside of the building has earned a coat of paint.

[concorde]

I'm not sure powerwashing would do anything. Isn't it just that the concrete that wasn't behind the logo faded while the bit of concrete that was behind the logo didn't?

I see your point, there could elements of fading that powerwashing won't fix

 

Shouldn't the cleanup fee be part of the signage fee CIBC pays? If the landlord is passing that onto other tenants then it's no wonder so many are jumping ship.

Triple net works that every single item of maintenance is charged back to the tenants including sweeping the sidewalks, washing the windows, even replacing the roof or the mechanical rooftop units.  Even the management fees to collect rents and process month accounting statements are charged to tenants.  That is how it works pure and simple.  It doesn't matter if its a brand new building or an older building like the CIBC tower

 

I did hear that the owner of the building does not want to spend any money trying to fix up any of the empty space to try to lease it.  Its rapidly coming to the point they have to do something

 

I am surprised to hear that CIBC owns the building, most banks sold off their real estate many years ago and preferred to then lease back the space.  I own a few bank buildings in town and they are great tenants

[Mike K.]

I see your point, there could elements of fading that powerwashing won't fix

 

Triple net works that every single item of maintenance is charged back to the tenants including sweeping the sidewalks, washing the windows, even replacing the roof or the mechanical rooftop units.  Even the management fees to collect rents and process month accounting statements are charged to tenants.  That is how it works pure and simple.  It doesn't matter if its a brand new building or an older building like the CIBC tower

 

Yes that's true, I'm just surprised that a landlord would charge every tenant for something that is specific to a single tenant. The fees for power washing the accumulated dirt/whatever from a tenants signage should be covered by the signage fees, IMO. I'll be sure to remember this point next time I'm reviewing a commercial lease. I'm sure most commercial tenants would be peeved at any cost attributed to the business dealings of one tenant being shared by other tenants.

[jklymak]

Maybe landlord tripe nets the signage fees back to other tenants? After all if they are charged for every expense they should be compensated for every income.