HomeMy WebLinkAbout99-034 - CB Commercial - 6300 Building Property ManagementCOMMERCIAL
MANAGEMENT AGREEMENT
CB COMMERCWEAL ESTATE GROUP INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
•
THIS AGREEMENT is made as of the 1st day of January , 19 99 , between
City of Tukwila (hereinafter known as "Owner"),
and CB COMMERCIAL REAL ESTATE GROUP, INC., a Delaware corporation (hereinafter known as "Agent"). Owner hereby
designates Agent as the exclusive managing agent for Owner's real property, hereinafter known as "Property," and which is
described as follows:
1. Responsibilities of Agent:
Agent shall appoint a Real Estate Manager to manage Property, and said manager shall be Agent's primary representative
in managing Property. The authorities, duties and responsibilities of Agent in connection with the management of Property
shall be as follows:
(a) Agent shall take reasonable steps to collect, and enforce the collection of rents and other charges due Owner from tenants
of Property in accordance with the terms of their leases or rental agreements.
(b) From Owner's funds, Agent is authorized to pay all loan payments, all operating expenses and all other expenses of
Property. If Owner elects to have any payments made in a manner other than as herein provided, Owner shall notify Agent
in writing. Expenses of Property shall include all of Agent's expenses directly related to Property.
(c) Agent shall monitor independent contractors responsible for the routine repair and maintenance of Property. No single
improvement, alteration or repair costing more than all improvements to be coorcli naterl with the owner
Dollars ($ ) shall be made by Agent without Owner's prior authorization. However, in case of an
emergency, which, in the opinion of Agent, requires immediate repairs or alterations costing in excess of the above amount,
Agent may exceed said amount in its discretion.
(d) Agent shall submit all leases and modifications and extensions thereof to Owner for review and execution, and Owner
agrees to furnish Agent with a fully executed copy of said documents. For month-to-month residential tenancies, Agent
or designated employees of Owner shall be authorized to sign for Owner.
(e) Agent shall have authority to hire and terminate, on behalf of Owner, any independent contractors and Property employees
reasonably required in the operation of Property. It is agreed that all Property employees shall be either employees of
Owner, or a third party contractor, and shall not be employees of Agent. For Property employees for whom Agent processes
the payroll, Owner shall pay Agent as an expense of Property an amount equal to five percent (5%) of the gross payroll
as a payroll processing fee. Agent shall prepare payroll tax returns for said employees and make payment of such taxes
to appropriate agencies from Owner's funds. In the event Agent decides to place Property employees on the payroll of
a third party contractor and said third party contractor is Sutter Fremont Property Services, Inc. ("Sutter Fremont"), a
subsidiary of Agent, Owner shall instruct its insurance agent to name Sutter Fremont as an insured on its liability policies
insuring Property. The indemnification provisions of Section 3(a) of this Agreement shall apply to Sutter Fremont as well
as to Agent. If Sutter Fremont is the employer, it shall be paid the payroll processing fee described above.
(f) Agent's Real Estate Manager shall receive tenant communications on behalf of Owner and shall use reasonable efforts
to monitor tenant compliance with lease provisions.
(g) Agent is not authorized to practice law. If Agent deems legal assistance to be necessary for any reason, including but not
limited to rent collection or tenant eviction, Agent shall obtain such assistance from counsel approved by Owner. Any legal
action undertaken shall be in Owner's name only. All legal fees, costs and expenses shall be the responsibility of Owner
and paid from Owner's funds as an expense of Property.
(h) Agent shall maintain accurate records of all funds received and disbursed in connection with Agent's management of
Property and said records shall be available for Owner's inspection during business hours upon at least one week's notice.
Agent's accounting records and reports will be provided in Agent's standard report format as it may be revised from time
to time. Agent will provide variations in its standard format or additional reports at an additional charge to Owner. Owner
agrees that Agent will transfer Owner's funds, as needed for disbursements, along with funds of other clients of Agent to
centralized disbursement accounts maintained in Agent's name. Agent will derive direct benefits from such accounts which
are hereby deemed permissible compensation to Agent in addition to that provided elsewhere in this Agreement. After
deducting all expenses, reserves, any sums required by law and Agent's fees and commissions from gross monthly
collections, a check in the net amount of all funds collected for Owner's account shall be remitted monthly by Agent to
Owner at the address specified herein or as Owner may otherwise direct in writing. Agent shall also render to Owner a
statement showing all amounts received and disbursed for the period reported, together with supporting invoices.
(i) Agent shall cooperate with appraisers and counsel retained by Owner to evaluate Property or to appeal assessed values
but shall not be responsible for such undertakings.
(j) Agent shall manage any residential property under this Agreement in full compliance with the requirements of the Fair
Housing Act of 1968 and any other applicable federal, state or local antidiscrimination laws, regulations, ordinances or
other legal requirements, and shall take any action that it considers appropriate to carry out their purposes.
2. Responsibilities of Owner:
In consideration of the real estate management services to be rendered by Agent under this Agreement, Owner agrees
as follows:
F, -m ,.; 5211 Rev 5/92
1
(a) Owner shall promptly furnish Awith all documents and information require the management of Property, includir;y
but not limited to all leases, amendments and correspondence related thereto; the status of rental payments; mortgage
loan information and payment instructions; copies of service contracts in effect; and all applicable insurance policies. Agent
must receive accurate documents and information when initially taking over the management of Property and will charge
additional fees if the documents and information provided are inadequate.
(b) For purposes of this agreement the term "Hazards" includes, but is not limited to, asbestos, PCB transformers, other toxic
or hazardous substances, underground storage tanks, and health and safety hazards.
Owner shall determine what laws, regulations and ordinances apply to the Property (all hereinafter known as "such laws").
Owner shall take all reasonable steps, including inspections, tests or studies, to determine if the Property complies with
such laws and to cause prompt compliance therewith. Owner agrees that, at a minimum, inspections for PCB's and
asbestos are reasonable and hereby authorizes Agent to arrange for such inspections. These obligations shall continue
during the term of this Agreement.
Agent shall not be responsible for the obligations of Owner set forth above. Any expenses related to Owner's obligations
shall be an expense of Property. Such obligations shall be performed by a date and in a manner satisfactory to Agent.
Owner acknowledges that Agent does not have the expertise or qualifications technically to supervise subcontractors for
work regarding Hazards, and Agent shall not be required to do so.
If Owner has previously obtained any inspection reports regarding Hazards in the Property, such reports shall be listed
on Exhibit A to this Agreement and made a part hereof. In addition, Owner shall state on Exhibit A any other information
Owner has regarding Hazards in the Property. If Owner has no such reports and information Owner shall initial
here.
Owner authorizes Agent to advise prospective tenants and purchasers that all such reports should be examined by them
and that they should reach an independent decision with respect to the presence of any Hazards. Owner further agrees
to notify Agent, prospective tenants and purchasers at any time Hazards are discovered or reports are obtained addressing
Hazards in or about the Property. This disclosure must be made prior to the execution of a lease or purchase contract
between Owner and such tenant or purchaser.
Owner agrees either to (a) permit Agent to disclose to existing tenants Owner's information regarding Hazards and the
results of any inspections, tests or studies of the Property, or (b) provide evidence satisfactory to Agent that such
information and results have previously been disclosed to all existing tenants.
(c) Owner shall at all times maintain sufficient funds in the Property account to enable Agent to pay all obligations of Property
in a timely manner. If collections are projected to be insufficient or will not be received in time to satisfy this requirement,
Owner shall promptly provide Agent with the necessary funds, in advance. If Owner has not provided said funds within
seven days after Agent's request for them Agent may, at Agent's sole option, terminate this Agreement. Should Agent make
a payment for Owner's account and should a deficit occur therein, upon notification by Agent, Owner shall immediately
remit to Agent sufficient funds to remove the deficit. Agent shall not be required to advance funds for Owner's account.
(d) Ownerhall pay Agent as the fee for its management services the greater of (i) a minimum fee of
one thousand fide hundred Dollars ($ 1, 500 )per month, or
(ii) Percent ( %) of gross monthly coilections from Property. "Gross mui iihly collections"
is defined as the total of all rents, including an amount equal to any free rent concessions granted by Owner, security
deposits (when applied or forfeited), and other monies collected during the month from Property, including collections
made by Owner or others designated by Owner. Additionally, Owner shall pay Agent an administrative fee equal to eight
percent (8%) of any amount (including related professional services) totaling in excess of Five Thousand and No/ 100ths
Dollars ($5,000.00) which is expended for any construction or repair project in or about Property.
(e) Owner shall pay Agent commissions in accordance with the Schedule of Sale and Lease Commissions (the "Schedule")
attached to this Agreement for all leases and other tenancy agreements entered into during the term of this Agreement.
As used in the Schedule, "Broker" shall mean Agent.
Owner shall pay Agent commissions for renewals and extensions of existing and future leases calculated at one-half the
rates for new leases set forth in the Schedule, unless the renewal or extension is pursuant to tenant's exercise of an option
to renew or extend which existed prior to Agent's management of Property, in which case there shall be no commission.
However, if a tenant exercises an option, right of first refusal, similar right or otherwise, which was granted after Agent
commenced management of Property or was originally negotiated by Agent, a commission at the full rate in the Schedule
shall be paid to Agent. A commission at the full rate in the Schedule shall be paid if any tenant leases additional space
during the term of this Agreement. This Agreement does not restrict or waive any other commission rights which CB
Commercial Real Estate Group, Inc. may have pursuant to other agreements with Owner. Commissions payable in
accordance with this Agreement shall be authorized expenses of the Property. During the term of this Agreement, Owner
shall refer to Agent all offers and inquiries by, or on behalf of, prospective or existing tenants of Property.
(f) If, during the term of this Agreement, Owner determines to sell or exchange the Property, or any portion thereof, Owner
grants Agent, for a 180 -day term, the exclusive right to sell Property on terms acceptable to the Owner. Owner shall notify
Agent in writing of said determination, which notification shall specify the commencement and termination date of said
180 -day term and the sales price. If, during said 180 -day term, Property is sold, exchanged or otherwise disposed of,
whether the buyer is procured by Agent, any other broker, Owner or anyone else, a commission shall be paid by Owner
to Agent in accordance with the terms and provisions of the Schedule. If another broker procures a person or entity that
acquires Property, then Agent may cooperate with said broker, on terms and conditions acceptable to Agent, regardless
of whether the procuring broker represents the purchaser or acts as Agent's subagent.
3. Insurance and Indemnification:
(a) Owner hereby agrees to defend,indemnify and hold Agent harmless from and against all actions, claims, allegations,
liabilities, demands, damages, loss, attorneys' fees, cost or exp nse of any nature whatsoever, including, but not limited
to those based on acts of negligence (passive, active otea.1)M any way arising out of, based upon, or related to the
management of Property by Agent or the performance of any of the duties, obligations, or authorities by Agent hereunder.
(b) Owner shall insure the Property with commercial general liability insurance, including coverage for bodily injury, property
damage, non -owned auto, and personal injury losses, and said insurance shall cover claims on an occurrence basis and
Form No 52,1 Rev 5 / 92
2
have a broad form contract "lability endorsement (i) in amounts of not I than One Million Dollars ($1,000,000.00)
combined single limit cover along with an excess liability policy of an .ional One Million Dollars ($1,000,000.00),
or (ii) in the form and coverage amounts commonly carried by reasonable owners of properties similar in type, location
and value, whichever is the greater. Owner, on each of its insurance policies covering Property, shall obtain from its insurers,
waivers of subrogation against Agent and, if applicable, Sutter Fremont. Owner agrees that it will not make any claim
against or seek to recover from Agent for any loss or damage to Property or Owner which is coverable by such insurance.
(c) For its employees, Owner shall carry workers' compensation and employer's liability insurance, including employer's non -
owned auto liability insurance, at limits no less than that required by law. Owner shall comply with all local, state and federal
laws and regulations, including minimum wage laws, applicable to any of its employees. Owner further agrees to defend
and indemnify Agent from any and all claims, including all costs of defense, arising by reason of employment of any
Property employees.
- (d) Owner agrees that at all times during the continuance of this Agreement all bodily injury, property damage and personal
injury insurance carried by Owner on Property shall, without cost to Agent, extend to insure and indemnify Agent, as well
as Owner. see addendum is designated as Owner's insurance broker.
Upon execution of this Agreement, Owner shall review the insurance coverage for Property with said insurance broker
to ensure its adequacy and compliance with this Agreement. Agent shall not be responsible for obtaining insurance or
for the type, amount or sufficiency of insurance coverage of Property. By executing this Agreement Owner instructs its
liability insurer to issue an endorsement of such insurance coverage specifically naming CB Commercial Real Estate
Group, Inc., as an insured for the full limits available to the named insured. Copies of all insurance coverages and
endorsements required under this Agreement shall be delivered promptly to Agent.
4. Payment of Taxes:
Owner shall initial one of the alternatives below and elect the procedure to be followed with respect to payment of all taxes
and assessments levied against Property.
XX (a) Owner, the lender or tenant(s) shall be responsible for the payment of said amounts, and Agent shall have no
responsibility for payment.
(b) Agent shall pay said taxes from Owner's funds.
Owner shall ensure that Owner's account, or if applicable the lender's reserve account, has sufficient funds to pay said taxes
in a timely fashion.
5. Term of Agreement:
This Agreement shall commence on the 12th day of December , 19 98 , and end on the
last day of the month twelve (12) calendar months thereafter, if either party gives written notice of non -renewal thirty (30) days
prior to that day. If such notice is not given, the term shall be extended for additional periods of twelve calendar months each
until notice is given in accordance with the provisions outlined above. At the commencement of each extended term, the
minimum fee for such extended term shall be increased by ten percent (10%) of the minimum fee for the immediately preceding
term.
6. Termination Accounting:
In the event that any payments for Owner's account are received by Agent following the expiration or earlier termination of
this Agreement they shall be used to pay outstanding fees and invoices. In the event and to the extent that there are not
sufficient funds in Owner's account, Agent shall forward to Owner any unpaid invoices, and Owner shall be solely responsible
to pay same. For providing such services as well as other services relating to the transition of management, Agent shall be
paid an additional fee which shall be equal to the fee paid in the last month of the term of this Agreement.
7. Ownership of Records:
Except for those documents and records furnished to Agent by Owner, Agent's documents and records are the property of
Agent and shall remain in its custody on termination of this Agreement. If Owner so requests, Agent will provide Owner with
photocopies of pertinent documents in Agent's files and records, provided Owner reimburses Agent for Agent's expenses
related thereto.
8. General Provisions:
(a) If a petition in bankruptcy is filed by or against either Owner or Agent, or if either makes an assignment for the benefit of
creditors or takes advantage of any insolvency act or proceeding, the other party hereto may cancel this Agreement upon
ten (10) days notice in writing.
(b) Owner will pay Agent Seventy -Five Dollars ($75.00) per hour for each hour of Agent's time expended in connection with
any casualty, injury, suit, claim, engineering service, or hearing.
(c) If either party hereto brings an action to enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to reasonable attorneys' fees, in an amount fixed by the court, and costs.
(d) Unless Agent is receiving a commission for the sale of Property, Agent shall have no duty to either assist Owner in the
sale or potential sale of Property or to cooperate with a purchaser or brokers involved in such sale.
(e) This Agreement represents the entire agreement between the parties and supersedes all prior oral and written proposals
and communications. This Agreement shall be for the benefit of and binding upon the heirs, successors and assigns of
the parties hereto. This Agreement cannot be assigned without the written consent of the other party, except that Agent
may assign this Agreement pursuant to a merger or reorganization of its parent company, any subsidiary of the parent or
Agent, or any affiliate of either.
(f) This Agreement shall be governed by the laws of the state in which the Property is located.
(g) The person or entity executing this Agreement on behalf of Owner hereby represents and warrants that it is either the
Owner of the Property, has legal authorization from the Owner of Property, or has the Power of Attorney from the Owner
of Property and has the authority to legally bind Owner to this Agreement.
Form No 5211 Rev 5192 `3
9. Notice:
For all purposes of this Agreemen`, nless changed by written notice, the maileaddresses of the parties shall be
Owner's Notice Address. Agent's Notice Address:
6200 Southcenter Blvd.
Tukwila, WA 98188
Attn: City Administrator
Owner hereby acknowledges receipt of this Agreement and its Exhibits and attachments:
OWNER:
(Title
By:
c.lc
f a'C!!orporation or Partnership)
AGENT:
CB Commercial Real Estate Group, Inc.
Licensed Real Estate Broker
��ir'-cam>G Ti
(Title, if a Corporation or Partnership
EXHIBIT A
REPORTS AND INFORMATION REGARDING HAZARDS
Listed below are all inspection reports regarding Hazards on the Property. Owner shall provide copies of such reports to Agent.
In addition, set forth below is any other information Owner has regarding Hazards on the Property.
Form No 52'1 Rev 5/92 4