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

CAM, tax and insurance reconciliations during due diligence

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

Malls · Retail leases · Shopping Center · Uncategorized

Squeeze another 353 sf out of that space!

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!

Malls · Retail leases · Shopping Center · Uncategorized

Are your tenants still contributing to marketing?

I got in to the industry in 1987. At that time, there were still plenty of 10-30 year old leases still in effect. So many of those leases had requirements for tenants to participate in a merchants’ association (usually at some initial nominal rate with CPI increases). The tenants would control how those funds were… Continue reading Are your tenants still contributing to marketing?

Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

“That’s standard” is not a good enough answer.

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.

Malls · Retail leases · Shopping Center · Uncategorized

Why you should be at least slightly conversational in accounting, finance and lease administration

“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

Malls · Office Properties · Uncategorized

Due diligence before the due diligence?

When we perform acquisition due diligence on behalf of a buyer, we find two types of issues. The first is where the seller has presented information that overstates the income or conditions. The seller may have presented that a tenant’s minimum rent is $10,000 per month, but the lease states $9,000. Or, perhaps the lease… Continue reading Due diligence before the due diligence?

Retail leases · Uncategorized

Let’s eat, Grandma! Let’s eat Grandma!

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!