One of our earliest blogs was about the landlord’s standard lease being the best case scenario. Changes that are made to that standard lease are being done at the tenant’s request because the tenants have seen, over and over, how not changing those clauses has impacted their financials. Tenants are dealing with tens or hundreds… Continue reading Just how good was that tenant attorney?
This week, we were working on a small (six tenant) retail acquisition. There were only two different “standard” lease forms in place at this center, but each of the leases had very significant changes to the lease. One of the ways these leases were so different from each other was in the definition of the… Continue reading Unintentionally losing 19 months of the term
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
There are a few percentage rent calculation issues that make me happy (from a landlord perspective. If you are a tenant, you hate these!). True partial lease years – where a sales for a portion of a year are compared to the breakpoint for a portion of the year, and the tenant pays sales on… Continue reading The percentage rent unicorn
Site plan of King of Prussia Plaza from the early 1960s with an Acme Supermarket: Since the 1970s, it has not been common to see certain types of tenants in regional malls as department stores enforced certain types of use restrictions that existed in their leases (often to protect parking). However, as closures of former… Continue reading Gross sales/percentage rent considerations when backfilling a department store/big box
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 would have to guess that we may have annoyed a client this week because we would not drop an issue. Their leases required the inclusion of licensee square footage in Gross Leasable Area (GLA). Generally, most standard leases today define licensees as exclusions when calculating prorata shares. (Licensees themselves are typically defined as short… Continue reading Phantom Square Footage
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? 