By Allan Murphy
Sentinel Business Columnist
Readers of this column know that one of my real estate mantras is that the passage of time will kill all deals. Sadly, I’ve just been reminded that the mantra is well founded, as I’ve recently had a deal die, due in part to a too slow-moving process. Fair warning, a few sour grapes ahead.
The tenant and its broker had looked at many spaces in many buildings, and had even negotiated on some spaces, but without a successful conclusion. In retrospect, I suppose that should have been a red flag. Anyway, it seemed they had decided to move forward on a space in one of my listings.
The tenant’s evaluation, review, and negotiation took several weeks, with the tenant eventually extracting a good deal and getting pretty much everything they wanted with respect to the landlord improving the space. The process was lengthy but the people involved were pleasant and earnest. When we shook hands on the deal, it seemed that everyone was satisfied and committed—though as always, subject to getting an acceptable lease signed.
On the landlord side, we were a bit slow to get a lease out, but in the meantime the process of getting the space ready for the tenant was progressing. We provided carpet samples for the tenant’s selection and the tenant brought in its designer to pick paint colors. The pantry area cabinets, counters, and floor tiles were being selected, new HVAC units were being selected, and we had asked the tenant for their attorney contact to get them the lease.
However, we were over two weeks into the process and still didn’t have a tenant attorney contact to send over the lease—which should have been another red flag. Normally, I would be all over everyone at this point, but I did get slightly distracted by a powder-filled ski vacation for a few days, and the process, except for the lease review, seemed to be moving forward just fine.
Well, you know the rest of the story. Incredulously, I received a call from the tenant’s broker to let me know that the tenant had found a space they liked better and would not be proceeding with our deal. The tenant’s broker was also mildly incredulous, as the tenant had not involved its broker in the new deal or even alerted the broker to such a possibility.
I understand that circumstances sometimes arise that lead to broken commitments, and I would be annoyed regardless, but common courtesy and some personal and business civility shouldn’t be that hard to provide. I spent many hours with this tenant, and the tenant’s broker spent many months with the group. How about a call or note to say “I’m sorry for wasting everybody’s time, but I simply can’t pass up this other opportunity”?
Instead, this tenant simply called its broker and told the broker they’d found another space they would be taking. It wasn’t a big transaction and nobody was going to make much on it, but isn’t that even more reason to behave honorably? Or at least courteously? Unfortunately, not honoring a deal if a better option comes along happens too often and perhaps reflects an increasingly opportunistic world in which we live. We all live here—in Greenwich and on this planet—together. We can do better and we should do better.
As to timing and speed of process, I’m skeptical that the outcome would have been different in this case had we put a lease in the tenant’s hands right away, but it couldn’t have hurt. The passage of time will still kill all deals.
Allan Murphy is a senior managing director at the commercial real estate services firm Newmark Grubb Knight Frank. He has specialized in the Greenwich and Stamford markets since 1996.
