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?
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.
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!
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?
As a company, we spend our time making sense of the cash flows presented by sellers. Find where the seller may have overstated the cash flow. Find where they had missed opportunities. Basically, sort out the facts. There were a couple of articles this week that made their way around Twitter an LinkedIn because they… Continue reading Consider the facts behind the stories
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
I grew up using the expression “same difference.” I think I used it when I said something that I believed was right, but someone pointed out something that was wrong about what I said – but it wasn’t important enough for me to care. I think today I would probably just say “whatever.” There are… Continue reading Same difference – more subtle changes in lease language
What's new in lease administration? 