As underwriters of commercial real estate, we deal in facts. We read the leases, calculate all of the rents and reimbursements, examine the critical non-financial covenants, analyze the prior year cash flows and provide an analysis of the assumptions that our clients have made on vacancies and lease up and Tis and inflation and so on. However, we really do stick to the facts. If rents are currently $20 per square foot, and our client wants to assume renewal rents of $35. We use their numbers with the existing lease supported facts. We will let them know we think they are high, but it is up to them to interpret.
Again, we deal in facts.
Also, since we deal so heavily in acquisition due diligence, we are often bellwethers of larger scale trends. We can’t offer explanations as to why.
Fact – over the last 2-3 weeks, we are seeing a spike in the number of transactions in top tier properties (both office and retail) in second tier cities and their suburbs.
No interpretation – just facts.
We’ll be back to our standard lease administration blog post next week.