commercial real estate · Retail leases · Uncategorized

The first issue to review when starting due diligence on an acquisition

In the 30+ years that we have been doing abstracts and cash flow analysis as part of property and portfolio acquisitions, there is one issue that we do a quick check for before we start the acquisition process in full force: Rights of first refusal to purchase a property Why that issue? A right of… Continue reading The first issue to review when starting due diligence on an acquisition

commercial real estate · Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

Considering the proper treatment of tax abatements and incentives in your leases

I have the honor of serving on our city’s development authority. It is a recent appointment, so I cannot take any credit for the great things that have been done already. As part of the appointment, I was required to take a class that included a couple of hours on tax incentives and bond financings.… Continue reading Considering the proper treatment of tax abatements and incentives in your leases

commercial real estate · Malls · Retail leases · Shopping Center · Uncategorized

Be explicit – even fixed CAM can be tricky

There’s no doubt that prorata CAM, tax and insurance calculations can be tricky. You have to make sure the shopping center definition is correct, the expenses are correct, the method of calculating the leasable area is correct, the method of calculating vacancies is correct, the definition of excluded area is correct, the treatment of excluded… Continue reading Be explicit – even fixed CAM can be tricky

commercial real estate · Malls · Retail leases · Shopping Center · Uncategorized

Unique remedy language in the event of a violation

The majority of national and regional tenant leases contain some sort of tenant-negotiated restriction. It may be an exclusive use, or a specific prohibited use in the center (no educational facilities), or a site line restriction, or a restriction against a type of use within x feet of the premises (no food uses within 200’… Continue reading Unique remedy language in the event of a violation

Malls · Retail leases · Shopping Center · Uncategorized

A few more issues related to excluded area contributions

Last week we addressed a few of the issues to consider related to excluded area contributions, but two properties that we worked on this week made me realize I missed discussing two very significant issues – refunds/credits and recaptures as they relate to excluded area tenants. At one of the properties, an excluded area tenant… Continue reading A few more issues related to excluded area contributions

Malls · Retail leases · Shopping Center · Uncategorized

Excluded area contributions

When a tenant pays a prorata share of taxes or CAM, there are often defined excluded areas. Most typically, those defined excluded areas are either directly assessed, self-maintaining or insured, or are paying at a rate significantly less than full prorata. By defining those areas as “excluded areas,” the landlord reduces it absorption of CAM… Continue reading Excluded area contributions

commercial real estate · Retail leases · Shopping Center · Uncategorized

Real estate tax timing issues

When reconciling operating expenses, timing is often pretty straightforward. The tenants make monthly escrow payments throughout the year. The landlord reconciles the calendar year and applies those payments. An additional billing or credit is applied to a tenant’s account. However, taxes are a different story. While some municipalities bill taxes for calendar years, many bill… Continue reading Real estate tax timing issues