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
This past week, we worked on a 40 tenant open air center acquisition. Often times, a seller severely restricts the information provided to our clients, the buyers. Fortunately, this time, we had almost free access to the seller’s files. Many of the leases were leases that had been amended and extended 3,4,5 times since their… Continue reading Prior defaults
Often in retail, tenants will be required to pay their share of taxes using the square footage of the tax parcel of which they are apart. In other cases, they will be required to pay based upon the leasable area of the shopping center excluding separately assessed premises. Sometimes, just looking at the tax map… Continue reading Why look at a municipality’s tax maps or GIS data?
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
Exclusives, kickouts and cotenancies are typically the big three non-financial covenants that have to be confirmed on an acquisition because, along with the cash flow of the property, they have such an impact on value. More often than not, these provisions are fairly obvious in a lease, But, sometimes they are buried. This past week,… Continue reading The “backdoored” exclusive
Two or three weeks ago, we were working on a portfolio acquisition. There was an outparcel ground lease tenant that had the right to purchase its premises if the landlord ever sold the property. Our client asked the seller for the tenant’s release from its option to purchase the parcel. The seller replied that it… Continue reading “That’s standard” is not a good enough answer.
There really is a secret to a good abstract and, I apologize in advance because it will sound a little patronizing at first, it is to read the lease and fill out the abstract. Seriously? It does sound patronizing, doesn’t it? But, it is very obvious reviewing an abstract that has been completed using the… Continue reading The secret to a really good abstract