When we perform acquisition due diligence on behalf of a buyer, we find two types of issues. The first is where the seller has presented information that overstates the income or conditions. The seller may have presented that a tenant’s minimum rent is $10,000 per month, but the lease states $9,000. Or, perhaps the lease… Continue reading Due diligence before the due diligence?
A few months ago, we had a blog that addressed a difference in lease language where an excluded area was defined as any premises greater than 15,000 sf vs any occupant greater than 15,000 sf – a subtle change in lease language having a material impact on a lease’s or even a property’s cash flow.… Continue reading Leased vs. Leased and Occupied
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… Continue reading Strange things are afoot at the Circle K
This week, we were working on an acquisition of a property in the southeast. One tenant occupied the majority of the property, with a handful of other tenants accounting for about 10% of the leasable area, but about 20% of the income. There was a restaurant tenant that had a unique name that I had… Continue reading A couple of percentage rent/gross sales issues this week
I grew up using the expression “same difference.” I think I used it when I said something that I believed was right, but someone pointed out something that was wrong about what I said – but it wasn’t important enough for me to care. I think today I would probably just say “whatever.” There are… Continue reading Same difference – more subtle changes in lease language
I love the shows Pawn Stars, American Pickers and Mysteries at the Museum. With these shows, they find an item that interests them, authenticate it and then give a bit of history on the piece. As geeky as it may sound, there can be identifiable histories to leases and lease language. Did you ever pick… Continue reading “I need to call in my friend Pete to get some more information about this lease…”
This weekend, I was in South Bend and Chicago. On the way back to O’Hare, my wife and I had some free time, so we stopped at Macerich’s Fashion Outlets of Chicago. Besides having a beautiful, well thought out tenant mix, they have an outstanding parking garage. An outstanding garage, you say? Absolutely. I am… Continue reading Red light, green light, 1, 2, 3 …
Over the years, we have worked on 150+ tenant regional malls where the sellesr had been using 3-4 expense pools per prorata expense category, and we have also worked on 20 tenant open air centers where the seller had been using 20 different expense pools. What’s right? As new variables are introduced into leases, the… Continue reading How many expense pools are required?
I have mentioned in prior blogs that one of the things I love about lease administration is that everything you need to know about the lease is right there in 40-50 pages of the lease (sometimes as few as 2-3 pages, but sometimes as many as 500+). But, unless there are outside rules specifically addressed… Continue reading Intelligent people will argue
What's new in lease administration? 