CRE STEALTH NINJA
CHEAT SHEET
August 15, 2024
Shane Minnis
If maintaining privacy and confidentiality is a priority while looking to lease your next office, R&D or industrial space then this cheat sheet is for you… especially if you’re operating in Stealth Mode!
Over the years I’ve either had clients or negotiated with companies where safeguarding sensitive information, even their identity in the marketplace, was critical.
I’m going to provide you with insider tips to ensure your search for the perfect workplace remains discreet and secure.
I’ve been a Silicon Valley commercial real estate advisor with Colliers (NASDAQ, TSX: CIGI) specializing in office, R&D, and industrial leasing since 2009. Following are my insider tips…
Starting with beginner level and advancing to higher levels of maintaining privacy and confidentiality.
Personally, I’m into Brazilian Jiu Jitsu so each level is based on BJJ belt rankings – if you’re not familiar with the belt rankings, white = beginner and black = expert.
1) White Belt | Beginner
Anonymous Initial Inquiries – When you’re researching properties and gathering additional information it’s a good idea to keep your inquiries anonymous. Do so by using a generic email and phone number…
Otherwise, those free online listing websites will gather your information and pass it along to listing brokers or others purchasing leads. If you reach out on a property directly, the listing broker will try to gather as much information as possible to pass along to the property owner and there’s a good chance this information will be shared with others within the industry.
On-Site Property Tour Caution – Let’s get the easy ones out of the way… when you tour property avoid items with your logo or other identifying information – such as key fobs, folders/binders/tour packages, clothing, cars, etc. Listing brokers take note of these items right away – cover blown!
Also, keep the “Miranda Rights” in mind before disclosing information to listing brokers… because “anything you say can and will be used against you…” in the “court” of lease negotiations or market information sharing.
2) Blue Belt | Basic Ninja
Do Not Leverage Multiple Brokers – Instead I’d recommend following the “Less is More” motto… to align priorities, increase trust and have a unified approach to producing the best outcome for you.
When you leverage multiple brokers, you end up with misaligned priorities – emphasis is on the deal instead of what’s best for you. There’s no commitment to you or your priorities, nor you to them, which creates lots of potential for privacy breaches…
Limit Search to Key Members – Keep your search for space within a small circle of key team members who have a legitimate need to know. Minimize the number of people with access to sensitive information and ensure everyone understands the importance of maintaining confidentiality. Otherwise, unintentional oversights can undermine your privacy and confidentiality objectives.
3) Purple Belt | Intermediate Ninja
Non-Disclosure Agreement (NDA) – On an intermediate level, NDAs work pretty well on their own. However, they can be leveraged on a more advanced level by really knowing when and where to use them.
Confidential Letters of Intent (LOI’s) – LOI’s are used to negotiate the general business terms of the lease and are utilized before drafting a formal lease agreement. This helps streamline lease negotiations, especially when assessing multiple properties, and keeps costs down (lower legal fees).
If confidentiality is of heightened concern… the leasing entity could remain confidential during this phase of negotiations – after all, LOI’s are non-binding.
However, negotiated terms will likely be subject to disclosure of the leasing entity and landlord’s review of financials/credit of said entity before finalizing a lease. Pursuing this strategy will also necessitate finesse and upfront assurances – you’re essentially requesting blind faith and trust from landlords. This introduces added risk and uncertainty to negotiations and could adversely affect concessions offered.
4) Brown Belt | Advanced Ninja
Non-Disclosure Agreement (NDA) – On an advanced level, have your own NDA drafted by legal counsel so you know it encompasses everything you require from a privacy and confidentiality standpoint.
As early as possible, I’d recommend having your broker execute your NDA while also discussing your privacy and confidentiality priorities – this will help align expectations with all parties from the get-go. Then leverage your advisor in the marketplace as your public facing intermediary, utilizing your NDA when engaging other service providers, vendors, and when negotiating leases.
Use A Corporate Entity – This is a strategy used by many property owners (for various reasons) that can bring an extra layer of confidentiality to your search. Consult your attorney and CPA first, but this strategy calls for creating a limited liability company (LLC), subsidiary, or other entity that you have a controlling interest in to sign the lease therefore concealing your identity.
However, as you progress through lease negotiations, there may come a point where you’ll need to reveal your identity. Evaluating the financials and creditworthiness of the tenant entity signing the lease is a standard due diligence practice for most landlords. So, unless the financials and creditworthiness of the entity check out, it’s very likely the landlord will require some form of guarantee from the parent company. But no need for concern because as negotiations advance, you’ll be in a stronger position to safeguard your confidentiality and it’s another opportune time to introduce your NDA.
5) Black Belt | Stealth Ninja
Strawman Transaction – Reserved for Black Belt Stealth Ninja status this is a strategy where a strawman is engaged, usually for a predetermined fee, as a third-party that transacts/holds property in intermission for the sole purpose of transferring it to another (back to you).
Engage An Expert Advisor – When working with clients we recognize the significance of maintaining your privacy and confidentiality, especially if operating in stealth mode.
If this a top priority for you, we go beyond just saying we’ll maintain your privacy and confidentiality…We’ll gladly sign a non-disclosure agreement (NDA). We’ll even go further than that – we’ll provide you with expert guidance on reinforcing confidentiality throughout the process.
We know the industry inside and out and know that without careful attention, there’s lots of potential for privacy breaches – whether it’s due to unintentional oversights, inadvertent broker communication or other means that can undermine your objectives.
Dedicated To Helping You Get A Great Deal + Maximize ROI On Your Next Lease,
– Shane Minnis
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