When coming up with a blog topic for the week, I typically reflect back on one issue that stood out for the week. My guess is that it almost appears as if each of the issues are stand alone. But, this is never the case. Within one lease, you can have hundreds of potential changes,… Continue reading A need for a holistic approach to leases
No. It’s not a fight in the ring between two skyscrapers. It’s one of those capitalized/non-capitalized issues that can have a material impact on the cash flow of a property. Though many tenants may beg to differ, the majority of landlords do actually consider the financial health of their tenants. I cannot tell you the… Continue reading building vs. Building
Last week, we covered minimum occupancies as a percentage of GLA for denominator purposes. But, sometimes we see another type of minimum – absolute minimum denominators. That is where you might see language to the effect of “The tenant will pay its share of common area maintenance expenses based upon the leased area of the… Continue reading “Absolute” minimum denominators – Yeah! Right!
When a tenant’s prorata share is based upon the leased area of a shopping center (rather than leasable), a very common change to the lease language negotiated by tenants is the addition of a minimum occupancy. The language would read something to the effect of: “The tenant’s prorate share of CAM shall be based upon… Continue reading Minimum occupancies
Any change made to a lease has a value to one of the parties. Some have very straightforward calculable values – reducing minimum rent from $25/sf to $24/sf or changing the percentage rent rate from 6% to 5%. Others have an absolute calculable value, but take a little effort to determine that value – changing… Continue reading How do YOU determine the value of a negotiated exception to a lease?
Over the next week, I will be putting together a new class for ICSC’s John T Riordan School for Professional Development. The class will be offered as an elective for the Management, Marketing and Leasing tracks at the school which is being held September 23-27, 2018 in Minneapolis. A previous version of the class focused… Continue reading The economics of a lease
More often than not, when acquiring a property or portfolio, prospective purchasers are focused on future cash flows. When it comes to CAM, taxes and insurance, it is future reconciliations that will have the most impact on the buyer’s cash flow. However, when acquiring a property, it is critical to get as many years of… Continue reading CAM, tax and insurance reconciliations during due diligence
This past week, we had a call with a long term client to review the results of a lease audit. Typically, it is the accounting people, perhaps some accounts receivable people and occasionally asset management. We review additional historical billings and expected increases to cash flow. But, this week was a little different, it was… Continue reading Squeeze another 353 sf out of that space!
Over the past 2 months, there have been a number of stories about tenants “distorting” sales including this one in Shopping Centers Today – https://www.icsc.org/news-and-views/icsc-exchange/tenants-should-include-more-internet-returns-in-reported-sales-simon-says It is almost presented as a “breaking news” type item, but this issue, including internet returns and its technological predecessor, catalog returns, has been an issue as long as tenants… Continue reading Distorted sales and sales audits
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