Landlord asking for business plan, business and financial statements prior to sending lease for review?

I've notified property manager who represents landlord that I'm interested in leasing a retail space and have asked for a copy of the lease to review. We have not entered into any negotiations yet. Before sending me a copy of the lease, they want to review my business plans and personal and business financial statements and meet with me.
I've got the plans and financials and no problem with sharing (I understand why they need them) but is this normal practice for landlord to review all my documents before I've had a chance to review any lease? Could this affect the lease terms they send me?
Thanks in advance.
In Leasing Property - Asked by Renee L. - Jul 22, 2011
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Answer(s)

John A.
Broker/Agent
Campbell, CA

I think it unusual to want to review the lease before you know the space you have found, is one you want. What is most important, is the type of lease, net or gross. You would not want to review a number of leases before you have found the space you want.

Jul 22, 2011
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Renee L.
Owner/Investor
Albuquerque, NM

John A - to clarify, I've done the due diligence on my end and have decided that it's the space I want. I wanted to initiate the next steps so I asked for the lease document to review (and to have my lawyer review). I already know from initial review what type of lease it is (rent, terms, etc).

Jul 22, 2011
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Michael W.
Washington, DC

Pretty typical for them to want to review your business plan as leasing to you means they are taking risk on the success of your business and there is an opportunity cost they are taking on by taking it off the market. Also, if they are giving you any sort of tenant allowance towards the build out of your space they are essentially underwriting your business for what is the equivalent of a loan.

Jul 22, 2011
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Nancy G.
Broker/Agent
Rochester, NY

This is a normal question and reasonable. Some Agents won't even take on a client without knowing that the client or customer is serious about having a business plan or financing/cahs to pay for the space/property.

Jul 22, 2011
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Brandon C.
Broker/Agent
Long Beach, CA

This is a normal procedure, especially after the credit crisis. Landlords want to make sure that a prospective Tenant has the ability to perform on the terms they propose. In Southern California most Landlords and Agents will not look at a LOI (Letter of Intent), unless it is accompanied with financials.

Jul 25, 2011
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Daniel S.
Broker/Agent
Chicago, IL

Typically the process is the tenant's broker negotiates the business terms of the lease, then the Landlord sends the lease with those business terms. Typically the final business term that is negotiated is the security deposit or LC to secure this lease. This piece can be done during the initial negotiations or during the lease negotiations. But the Landlord cannot make the determination of the security without understand the financial health of the tenant and that is done by reviewing the tenant's financial statements. I would suggest that you asking to review a lease before agreeing to any business terms is highly unusual. If I were representing you I would recommend you not submit the financials until later in the process and I would recommend we get a sense of the business terms before we request the lease document.

Jul 27, 2011
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Rodney C.
Broker/Agent
Indio, CA

From the property management/ leasing side there is no reason why they should not give you a copy of their lease template, no terms just their standard lease that they use. Your concern that it could affect your lease term is valid in that if you are high risk they may ask for additional security, offer limited incentives, etc. As a rule the stronger your financials and business plan is the lower risk you are and the better position you are to negotiate. Owners want a secure tenant and will trade $ for that peace of mind.

Aug 4, 2011
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Brent G.
Broker/Agent
Columbus, OH

Asking for your business plan or financials is pretty routine and I would even say customary. But that usually occurs after the terms and duration of the Lease have been agreed to. Call it a contingency that an Owner would request as part of an agreement to Lease. It is the rare leasing agent that does not ask for such information, particularly when they are representing the Lessor's interests. With that said, the stronger your financials, the better leverage you have for T/I and more advantageous terms. I hope you have engaged an experienced leasing agent to advocate (go to war) on YOUR behalf....

Aug 15, 2011
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