Guest Commentary

By Valarie Angle

Executive Summary:

The more you consider on the front-end, the less surprises you will have down the road. Our wellness column writer and business owner learned the hard way - and wanted to share those lessons.

Get it in writing.

Financial wellness for brick & mortar business

Running a brick and mortar business means that you are likely to find yourself with the overwhelming task of renting commercial space. I will share a few lessons that we have learned in our search, negotiations, and rental of commercial property in Roanoke for The WellNest. Nothing in this column is intended to replace the advice of your lawyer or accountant.

Commercial Real Estate vs. Residential Real Estate

The Virginia Department of Housing and Community Development shares that tenants and landlords have legal protections under the Virginia Residential Landlord and Tenant Act (VRLTA), which applies to most residential rental properties in Virginia. Still, residential tenants are responsible for reading and understanding terms of their lease and possibly consulting an attorney before signing.

Likewise, tenants signing a commercial lease should thoroughly read, understand, and negotiate terms in their lease to suit their own needs as well as accept the requirements set by the property manager. Melissa Sevier of Briglia Hundley Law Firm shared that “unlike the Virginia Residential Landlord Tenant Act, which offers substantial guidance on the rights and obligations of residential landlords and tenants, the Code section governing non-residential tenancies leaves many of these determinations to the contracting parties.” Often, property managers email a generic lease template and direct tenants to Docusign with no discussion.

Lease considerations

Some of the common negotiations that we recommend discussing and fully understanding relate to Common Area Maintenance (CAM) Fees; Security Deposit and Refund; Utility Billing; Zoning Approval; Fire Code; Use of Property; Access; Rent Increase; Renewal; Build-Out; Repairs; Provisions for Natural Disaster/Force Majeure (remember COVID).

If CAM, Utilities, and other combined fees leave room for unforeseen charges, ask for a flat fee incorporation into the rent or a combination of fees. You do not have to simply accept the terms of the lease as it is sent. Our best experience was with a property owner who shared an outline back and forth with us before ever drafting the final lease.

In one case, before signing a lease we discovered that the fire marshal had deemed occupancy for the building at only 40 people due to code inadequacies. We were expecting to be able to operate events of over 400 people. We were fortunate that we were able to have a conversation with the fire marshal to answer questions that the building owner couldn’t. When

you ask questions and receive vague or glossed over answers, be wary. It’s your responsibility to have the facts at hand in order to make solid decisions.

In another case, the property owner wanted to be able to micromanage our activities, times of events, and access to the space. Especially if you are sharing a building with other tenants, beware of these assumptions and restrictions. Ask that your needs are explicitly written into the lease. For example, if you expect 24-hour access to your space and the right to conduct any and all legal activities to the benefit of your business, get it in writing. This same property manager also wanted to be able to drop-in at will, without notice for non-specific reasons.

Unless the property manager is a loyal customer, I’d feel more comfortable having a 24-hour notice requirement in my lease. In one case, the space was advertised as “24-hour access,” but later the property manager changed the building hours to close at 5pm. Fortunately, this change was void because of a solid lease agreement, though we could never get the main door to stop automatically locking at 5pm and were required to have extra staff to man the outer door.

Will you pay for repairs and bill the property manager? What is the timeline expectation for maintenance requests? Is there an insurance minimum requirement? What happens if there is another State of Emergency and businesses are forced to close? These questions might be uncomfortable on the front-end, but your peace of mind is priceless.

From the Owner’s Perspective

Property owners are regular people. They hold political, religious, and community affiliations just like anyone. They own property for one reason: financial gain. At the end of the day, most people aren’t doing business for the sake of the greater good, but to be successful in their business and societal endeavors. Keep this in mind and understand that you may find yourself negotiating with someone you really resonate with and enjoy working alongside. At the end of the day, business is business. You must look out for your bottom line, just as a property owner must. Don’t get romanticized by the notion that common vision or enthusiasm for a project is going to override profit.

One example of this is the loss of rental income tax deduction. You might have an opportunity to lease a space for less than market value. But property owners with more than 10% ownership can actually take a $25,000 rental income loss deduction on their income taxes for unoccupied properties. If this becomes more attractive for property owners than the amount you are paying for the lease, guess what’s going to happen next? The property owners will make the decision to either raise your rent or not renew your lease. You’ll be forced out and they will be taxed on up to $25,000 less than their reported income per owner.

We all want to live in a friendly, collaborative community. However, business is meant to help you prosper and enjoy your work life. Taking responsibility for careful planning in your lease negotiations may be time consuming, frustrating, and difficult at times. The more you consider on the frontend, the less surprises you will have down the road. Remember, Virginia commercial tenants rely heavily on the written agreement. Make it work for you. We are taking a break from brick and mortar for the time-being, but you can continue to find The WellNest Roanoke online, connecting our community with Roanoke’s top wellness professionals.

Valarie Angle is the owner & director of The WellNest Roanoke, downtown Roanoke’s holistic hub where dozens of wellness practitioners serve the community through services, classes, and special events. Valarie earned an Educational Specialist graduate degree from Virginia Tech; a master’s in liberal studies from Hollins University; and undergraduate degree in Early Childhood Education from the University of Central Florida. She and her partner, Jonathan, are passionate about growing a wellnessfocused community. Contact her at [ connect@ thewellnestroanoke.com ]

Jennifer Poff Cooper is a senior correspondent for FRONT, and a graduate of the RB Pamplin College of Business at Virginia Tech with a Master of Arts in Liberal Studies from Hollins University. She is a native of Christiansburg, where she lives and writes in her family’s home place. [cooperjp91@gmail.com] Neal Cummings is senior vice president, commercial lending at Freedom First Credit Union. He brings over 25 years of experience in commercial and retail banking, commercial real estate lending, and small business development. The Commercial Lending team at FFCU provides local underwriting and personalized services that benefit a variety of individuals, operating businesses, and non-profit organizations.

Michelle Darby is Vice President, Marketing & Communications at Goodwill Industries of the Valleys. A graduate of Roanoke College, she previously served in executive roles at United Way of Roanoke Valley and the SalemRoanoke County Chamber of Commerce. She has developed marketing and communication strategies for over 15 years, emphasizing productivity and measurable results.

Shannon Dominguez is Virginia Director of Operations for Building Beloved Communities, a business consulting firm focused on communitycentered solutions. [ shannon@buildingbeloved communities.com ] director for Valley Business FRONT and owner of The Proofing Prof proofreading services (proofingprof.com). His background includes service in the U.S. Air Force and an extensive career in education, including teaching college-level writing competency and business courses, and working for a Fortune 100 company. [ddowdy@vbFRONT.com] Tom Field is a creative director, marketing executive and owner of Berryfield, Inc. in Salem, and owner of Valley Business FRONT magazine. He has written and produced programs and materials for local and international organizations for 40 years. [tfield@berryfield.com] Christopher Finley is the Director of Marketing and Public Relations for LewisGale Regional Health System. He leads the marketing and communications functions for 44 HCA Virginia Health System-owned patient care facilities, including four hospitals, two freestanding ERs, two regional cancer centers, and affiliations with both employed and independent physicians. Since 2004, he has also served as an adjunct professor for the School of Communication at Radford University where he earned his master’s in corporate communications. [christopher. finley@hcahealthcare.com] Micah Fraim is a topreferred Certified Public Accountant and business finance strategist who is well-connected in the regional business community and nationally recognized. Publisher of The Little Big Small Business Book, he also publishes a blog at www.fraim.cpa/blog and is frequently interviewed as a business financial expert in national media channels. [ micahfraim@fraimcpa.com ] Will Hall is the Chief Executive Officer of Beacon Partners Consulting. They specialize in Human Resources, Operational Efficiency and Brand & Marketing. A graduate of Roanoke College, Will has several years experience working in the consulting field with small business owners. When not consulting you can find him at a local pickup game playing basketball.

Kevin Holt is a partner at Gentry Locke’s Roanoke office where he has worked since 1998. His specialty practice area is commercial, real estate, intellectual property, and ERISA (Employee Retirement Income Security Act) litigation. He enjoys supporting and attending games of his two sports-active daughters and enjoys traveling (visiting 27 countries and 38 states).

Jennifer Leake is an expert in employee assessments and their use to better select, engage and lead employees. Jennifer has over 20 years of assessment experience and is certified in multiple assessments, including Emotional Intelligence and Employee Engagement tools.

Mike Leigh is president of OpX Solutions, LLC, a performance improvement company that helps organizations pursue operational excellence. A retired naval commander and former GE manufacturing manager, he has extensive experience in leadership development and process improvement. [Mike@ OpXSolutionsLLC.com] Gene Marrano is FRONT editor and an award-winning anchor and reporter for WFIR Newstalk radio. He recently won best feature award from the Virginia Association of Broadcasters for his Dopesick interview with Beth Macy. He also now hosts and co-produces “Business Matters” on Blue Ridge PBS. [gmarrano@cox.net] Holly Marrow is a nurse and freelance writer living in Christiansburg. She earned a journalism degree before going back to school to become a registered nurse. [ hollym59@gmail.com ] Jeff Merritt is vice president of Roanoke operations for Cox in Virginia. He is responsible for leading employees and the day-today operations across the Roanoke market. He holds leadership roles in a variety of organizations including Boys & Girls Clubs of Southwest Virginia, Western Virginia Foundation for the Arts and Sciences, and Virginia Cable Telecommunications Association. He resides in Roanoke with his wife and two children.

Mary Ann L. Miller is vice president of business banking and community relations at Bank of Botetourt. A graduate of Bridgewater College, she has been in the banking industry for more than fifteen years and currently serves on the board and executive committee as past-president with the Botetourt County Chamber of Commerce, a board member with the Daleville Institute, and is vice chair of the board of with the Botetourt Family YMCA. A native of Botetourt County, she resides in Daleville with her husband and two children.

Michael Shelton is a Registered Financial Consultant, tax specialist, and owner of 360Wealth Consultants. His firm specializes in providing retirement planning and wealth preservation strategies for business owners and astute individuals. What really has the locals excited, though, is his groundbreaking, proprietary software, designed to streamline accounting and wealth planning for business owners of medical practices, real estate properties, and construction industry businesses. [michaal@ discover360Financial.com] Dan Smith is a Roanokebased writer and journalist, former editor of FRONT, whose new novel (8th book) NEWS! will be out this summer. [ pampa dansmith@gmail.com ] Nicholas Vaassen is a graphic designer with 19 years experience, specializing in publications. His design projects include FRONT, lifestyle, real estate, municipal, classified sales and cultural organization magazines in Roanoke and southwestern Virginia markets. [nvaassen@ berryfield.com] Michael Waldvogel is the president and chief executive officer of Waldvogel Commercial Properties, founding it in 2004. With three decades of commercial real estate experience, he was also the founding principal of Waldvogel, Poe & Cronk, a business development director for the Better Business Bureau, and executive director of the Downtown Business League. He is active in a number of business, professional, trade, and service organizations, and is an outdoor enthusiast and runner.