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!
We were working on a property this week that had a newer 20,000 sf fitness center on a gross lease at an incredibly low rate per square foot. It wasn’t the rate per square foot that bothered me – it was at the back of the center not fronting on the main parking lot. It… Continue reading This should bother you
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.
“Ambitious men do not ask questions for fear their infallibility will be challenged” – Washington (or John) Roebling My apologies to David McCullough who wrote The Great Bridge about the building of the Brooklyn Bridge for not even knowing whether it was Washington or John Roebling who gave us that awesome quote above. But, whether… Continue reading Why you should be at least slightly conversational in accounting, finance and lease administration
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
A comma can change the meaning of a sentence fairly drastically. And, for lease administration purposes, it can have an unexpected impact on cash flow. The clause below was from a center we worked on last week: “Tenant’s Proportionate Share” shall be equal to the number of rentable square feet included in the Premises divided… Continue reading Let’s eat, Grandma! Let’s eat Grandma!
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