Tenants here one day gone the next

Generally for as long as they are required to under the lease.

Brothels or other such businesses which cannot easily relocate.

Retail is a specialised field with laws regulating what is done. These are more important to have managed by a retail property manager.

I had to choose my words carefully, I could have said that they were ‘hard’ to relocate but that would be inappropriate.

SNM

Based on two tenants (on seperare warehouse properties) I have:

1. Both were on 3x3x3 leases, they chose to opt out after the 6th year.

2. First was a mechanic and second ran a gym/karate classes.

3. No, both refused the option of the 3rd x3 lease tenure, didn't break them "early" like within 3 years.

4. The mechanic I had expanded and needed a much bigger premise (1,000m2+), the gym/karate class guy opted out because of building facility issues that I had no real choice over. The building was aging and there was nothing I could do to keep him there. Faced pretty stiff competition from nearby (within a 10km radius) of newer and bigger named (e.g. Fitness First) gyms. The other problem was that my warehouse was too big for him to fully use. I have 1,000m2 of FLOORSPACE – he could only make use of about 500m2 max. I allowed him to sublet but he demanded lower rental rates, which I couldn't afford to.

5. Not sure, having said that, I would say 95% of all businesses wouldn't stay for a long time. Speaking to mates/agents in the warehouse industry, the only ones who can keep tenants in are shopping centres (goodwill invested, not easy to rebuild).

6. Don't know

7. As many may have mentioned to you, the commercial/industrial type property fluctuates and is heavily affected by the economy.

Take the above info with a grain of salt as this is purely on my experience, not a qualified expert!

The more they have to invest to fit out the space the longer they are likely to stay at the premises.

It varies so much from area to area that it’s almost hard to give a straight answer. We do most of our stuff here in Canada but a little in Australia as well. In my hometown, you almost can’t get a tenant to sign a lease because the businesses are struggling so bad and there is so much vacant property. In Toronto, they won’t bat an eye if you ask them to stay 5 years and they will likely stay the whole time. It’s really just a matter of demand. You’ll want to see what some of the averages are for the area you’re investing in.