Lots of co-op and condo buildings in the city play host to one or more permanent guests on their ground floors; sometimes it's a mom-and-pop hardware store, or maybe a row of sleek, upscale boutique clothing stores. Humble or haute, commercial tenants can be a valuable source of income for residential buildings; but there's more to making a success of the arrangement than just hanging a "Store For Rent" sign in the window of your building's available space and waiting for prospective tenants to bite. This is not just a regular landlord-tenant relationship; you have a responsibility to residents and shareholders to determine how a commercial tenant might impact the value of your property.
"It's not the same as a landlord just doing it for money," says Abbey Goldstein of the Kew Gardens-based law firm of Goldstein and Greenlaw, LLP. "The co-op wants to reap the benefits of the tenant moving in, [but that can't happen] if the tenant coming in is going to compromise the quality of life."
So how can your board protect itself, keep the best interest of the building in mind, and foster a healthy landlord-tenant relationship with a commercial business at the same time? Here are some important points to consider if your building is home to a commercial guest.
Clearly, the kind of commercial tenant you have in your building is determined by the relative cost of square footage in your neighborhood, the tone already set by other adjacent businesses, and what will work best for the shareholders in your building.
According to Faith Hope Consolo, vice chairman of Garrick-Aug Worldwide, Ltd., a commercial space broker based in Manhattan, "The most appropriate tenant depends on the neighborhood; whether they're in a purely residential area like the Upper East or West Side, and whether that neighborhood has become gentrified lately. The neighborhood defines the type of tenant, and so does the building."