Marketing Strategy: The Hogan Building marketing plan will be to highlight its location and the opportunities and conveniences its location affords business, retail and residential tenants alike. Being located in the central business district blocks from the Convention Center ensures consistent foot traffic for the retail tenants and provides convenient access to the business community and the seat of City and County Government for the office tenants. Residential tenants will be drawn to the areas vibrant nightlife and world class dining, which is only blocks away. The Hogan Building's sustainable features will allow the building to be marketed as "eco-friendly," and/or "environmentally responsible." In short, the Hogan Building will be marketed as a great place to do business and call home.
Marketing Budget: $10,000 shall be alloted for use in production of marketing brochures and materials and placement of building advertisements in the electronic medium. The Hogan Building shall have its own web-site created that allows interactive tours of the facilities and surrounding areas.
The building will also have its own Facebook page where tenants and prospective tenants can share information about their building experiences. It is not anticipated that rental discounts will be necessary to lease up the Hogan Building. Regardless, in case needed, an additional $5,000 has been included in the marketing budget for rental discounts in the first 6-months of the building's operations. The total marketing budget leading up and to and through the first six months of building operations is $15,000.
Leasing Commissions: Compensation structure for the leasing agents will vary by property type. For all leases, the agent will receive a 5% commission. The payout for that 5% shall vary by property type.
Retail: For the retail spaces, the lease commission shall be payble half at the time the lease is signed and half when the tenant moves into the space.
Residential: 1-year leases shall pay 40% of the lease commission when the lease is signed. The remaining 60% shall be placed in an escrow and paid to the agent in equal shares on the first of each of the 12 months of the lease as long as the tenant remains. Should the tenant vacate the premises prior to completion of the lease term, the agent does not receive the balance of the commission in the escrow account. Instead it reverts to the owner to be used in filling the space with a new tenant. This will motivate the leasing agent to complete due diligence in qualifying prospective tenants.
Office: 5-year leases shall pay 50% of the lease commission when the lease is signed. The remaining 50% shall be placed in an escrow and paid to the agent in equal shares on the anniversary date of the lease for each of the 5 years of the lease as long as the tenant remains. Should the tenant vacate the premises prior to completion of the lease term, the agent does not receive the balance of the commission in the escrow account. Instead it reverts to the owner to be used in filling the space with a new tenant. This will motivate the leasing agent to complete due diligence in qualifying prospective tenants.
Lease Highlights: All leases shall be of the base rent variety. Highlights for each of the lease types follow:
Residential: This shall be a standard residential lease where tenant pays electricity, cable, water, internet, etc., separately. Assuming all payments during the lease term are made timely, tenant shall have the option to renew the lease 30-days prior to expiration. The request to renew must be in writing. Renewal shall be for a term of 1-year. Renewal rate shall be at a 5% increase from the original rent rate or then previling market rents within a 2-mile radius for similar type residential properties -- which ever is higher. Building security services and janitorial services to building common areas are included in the lease. Recycling shall be enouraged, but not required of residential tenants.
Retail: A percentage of sale rents arrangement was considered and declined. The Hogan Building owners prefer to be strictly in the real estate business and not a hybrid real estate/retail hybrid. There shall be no co-tenancy clause. Within the lease term, annual rents shall increase 3%. If any retail tenant vacates the premises, the remaining retail tenants shall have the right of first refusal on space contiguous to their own. This right must be exercised in writing within 15 days of the tenant being notified of the vacancy. Should the existing tenant exercise this right, the rent on the additional space shall be at then prevailing market rates.
Assuming all payments during the lease term are made timely, tenant shall have the option to renew the lease 120-days prior to expiration. The request to renew must be in writing. Renewal shall be for a minimum term of 3-years, but may be longer if the tenant and owner agree. Renewal rate shall be at a 5% increase from the original rent rate or then previling market rents within a 2-mile radius for similar type retail properties -- which ever is higher. Building security services and janitorial services to building common areas are included in the lease. Basic daily janitorial services such as emptying the trash, vacuming, sweeping the floors and light dusting will be included as part of lease.
Recycling shall be required of retail tenants. Retail tenants that fail to recycle glass, plastic, and cardboard shall receive one verbal warning. A second violation will receive a written reprimand and notice to cure. Third and any future violations shall be sanctioned with $100 per incident fine that will be payable within 10 business days.
Office: Office lease rates shall increase 3% per year within the lease term. There shall be no co-tenancy clause. However, the owner agrees not lease to another business enterprise that is in the same industry as current tenants without the current tenant's approval. For example, if a CPA firm is a current tenant, then vacant space will not be leased to a CPA firm that would compete with the existing tenant CPA. If any office tenant vacates the premises, the remaining off tenants shall have the right of first refusal on space contiguous to their own. This right must be exercised in writing within 30 days of the tenant being notified of the vacancy. Should the existing tenant exercise this right, the rent on the additional space shall be at then prevailing market rates.
Assuming all payments during the lease term are made timely, tenant shall have the option to renew the lease 180-days prior to expiration. The request to renew must be in writing. Renewal shall be for a term of 5-years. Renewal rate shall be at a 5% increase from the original rent rate or then previling market rents within Fort Worth's Central Business District for Class B Office Space -- which ever is higher.
Building security services and janitorial services to building common areas are included in the lease. The security services include premises surveillance and controlled access to the premises 24-hours a day. Basic daily janitorial services such as emptying the trash, vacuming, sweeping the floors and light dusting will be included as part of lease. Recycling shall be required of office tenants. Office tenants that fail to recycle glass, plastic, and cardboard shall receive one verbal warning.
A second violation will receive a written reprimand and notice to cure. Third and any future violations shall be sanctioned with $250 per incident fine that will be payable within 10 business days. Should tenant violate this provision of the lease 7 times within any 12-month period, owner shall have the right to terminate the lease for cause upon 5 days written notice.
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