Office Properties · Uncategorized

Office leases – Are taxes part of operating expenses?

The short answer? The lease should specifically address whether taxes are reconciled as part of operating expenses or are reconciled separately. But, why should this matter? This week, we were working on an office tower acquisition in the southeast. The majority of the leases had the typical “tenant pays a proportionate share in excess of… Continue reading Office leases – Are taxes part of operating expenses?

Malls · Retail leases · Shopping Center · Uncategorized

Co-participation and similar obligation

It is not uncommon to have co-participation clauses in retail leases – a clause which states that a tenant will be obligated to pay a certain charge at a specific rate with annual increases to that charge, but “only if at least 70% of the other tenants are similarly obligated to pay such charge.” The… Continue reading Co-participation and similar obligation

Malls · Retail leases · Shopping Center · Uncategorized

Retail – the fatalists and the opportunists

This past week, Sears announced another 42 closures. As usual, we see even retail real estate executives posting or re-posting about the “Dying Retail Sector.” But, what I see regularly, not from these fatalists, is successful real estate companies take a different approach – “How do we take advantage of these opportunities?” One particular client… Continue reading Retail – the fatalists and the opportunists

Malls · Retail leases · Shopping Center · Uncategorized

So a cow walks up to a drive thru… Operating hours and liquidated damages

This week’s (and next’s) post will be a bit shorter as I am in India with my son. This picture reminded me of Chick-fil-a which reminded me of a clause I ran across earlier in the week. Most retail leases have operating hours requirements which provide for default if the tenant does not maintain the… Continue reading So a cow walks up to a drive thru… Operating hours and liquidated damages

Malls · Retail leases · Shopping Center · Uncategorized

Common area taxes and liability insurance

In the majority of retail leases (and in a smaller portion of office leases), we have sections in the leases that address how to calculate the tenant’s prorata share of real estate taxes as well as tenant’s share of property insurance. This can be a little confusing if you do not read leases regularly because… Continue reading Common area taxes and liability insurance

Malls · Retail leases · Shopping Center · Uncategorized

Percentage rent using different partial year methodologies

Percentage rent is where a tenant pays a percentage of its sales once it has exceeded a certain base level of sales. The better a tenant does, the better the landlord does. If the tenant does not exceed the base level of sales, or the breakpoint, the landlord does not receive percentage rent. In most… Continue reading Percentage rent using different partial year methodologies

Malls · Retail leases · Shopping Center · Uncategorized

Retail evolution and the need for lease language changes

Experiential retail. Bricks and mortar stores as distribution points. Online sales returns. Showrooming. We are continuously bombarded with articles about the death of retail, the evolution of retail, stores closures, the death of retail being exaggerated, announced stores closings, announced store openings. While there seems to be little agreement about the future of retail, there… Continue reading Retail evolution and the need for lease language changes

Malls · Retail leases · Shopping Center · Uncategorized

The most dreaded lease clause – Most Favored Nations

This week, I was working on an office acquisition and came across a clause I had never seen applied in office before – a most favored nations clause. The clause essentially read: Notwithstanding anything in the lease to the contrary, no other tenant in the Property shall have a more favorable rental rate (which was… Continue reading The most dreaded lease clause – Most Favored Nations