New York City Commercial Leasing provides information on leasing commercial space & commercial real estate in New York City.





















































































































"Hi Fernando. It occurs to me that you may enjoy reading an email I sent this week to another broker in Fla. that is having the same first experience as you are with his first "cross-border" retail client and its first entry for roll-out in the US. He found me via the educational webpage
www.leasingnyc.com and read some of the "protective how-to" booklets on cross-border caveat emptor differences in the US. So I will quote the relevant text without disclosing names etc. to protect the innocent! Also I will attach the new book which is at the editors for final review before printing that I discussed in his email. Hope this all helps. My best, JB"

"Hi Christopher. Yes, I understand. Our "cross-border" clients start out this way all the time. They do not in most countries have the rule of law concept of "caveat emptor" as we do in the US and they either have "civil code" protections or statutory leases that are about 20 pages rather than our 60-100 page carnivorous ones.

For our Spanish and German speaking companies I ask them to speak with my partner Brian Dunning who is a litigator but really is culturally Catalan and Spanish ( fluent in both and German ) in his thinking and speech and he tries to help them understand that during the term sheet or deal formation process/phase, they need to ask for the things that neuter hidden costs and risk shifting or they will not obtain them during the document negotiation phase. These hidden costs and risk shifting usually over a 7 year lease aggregate in to over $100 per r.s.f. I am glad you are giving them the things to read. As we discussed, the only way to deal with malls like Aventura, Westfield, Macerich, Taubman and Simon are to have pre-formulated standards such as uniform use clause and rights for share ownership transfer and tradename changes "as of right" and issue them at the term sheet phase.

Cross-border clients usually do not read the materials on cultural differences in contracting and negotiation before entry and so they probably will not read them before their first deal either. Most of our cross-border clients do not as well until after the first transaction when the "culture shock" and hidden "sticker shock" sets in. Also after the "roll-out" of their US stores are complete and they want to franchise them or sell them, the early stores are more difficult to keep in the transaction or are not transferrable at all because of poor early planning. There are no easy and cost free "do-overs"!

I will attach my new book that is being published this month for you to share with them and for you to use as well. It is in pdf and at the editor's but it picks up on these themes as well as the necessary protective structuring of their corporate holdings to protect them such as having each store in a "street" corporation or all in a US Holding Company that is controlled and owned off-shore. All my Swiss, Spanish, German and Scandinavian clients do this after the first one. English and French clients do it first for some reason. Why others don't seem to get it for the first one is just always a surprise to me! Also the educational website has similar "cross-border" caveat emptor protective booklets for German and Swedish Chambers of Commerce under the resources tabs for their use.

I certainly agree that this common practice on the first entry is truly a cultural difference and they are much more protected by laws at home. This attached manuscript of the next book on Cross-Border - For Beginners - Structuring for Success will help them understand our "caveat emptor" legal based system and that if you want protections and not to pay for unnecessary hidden costs and bad risks, you have to demand it up front and in the term sheets.

Good work on looking out for them and it is great that you are doing this to help their first entry in the US be less painful and costly than usual for cross-border entrants. Also feel free sharing my communications with them. I have been working hard for 36 years to help our cross-border neighbors come to the US and enter our wonderful market but with care and protections so they do not have costly "do-overs" or leave with a bad feeling.

So here attached is the new book and the additional one which is an NYU Graduate School textbook, Navigating the Dangerous Shoals of a Commercial Lease - For Beginners on the website under the tab "Leasing for Beginners" would be a great read for them. It is a horror story of hidden costs in the "killer leases" and they might get some sense of the predatory behavior in leases if they read that as well.

So, good luck with them and protect them well so you get to help them all over the US. That will be their best protection on a uniform standards basis and you can issue "client contracting and leasing standards" at the next time they do a deal (though better if you could on the first one!). My best to you and them. John"