Over the past 2 months, there have been a number of stories about tenants “distorting” sales including this one in Shopping Centers Today – https://www.icsc.org/news-and-views/icsc-exchange/tenants-should-include-more-internet-returns-in-reported-sales-simon-says It is almost presented as a “breaking news” type item, but this issue, including internet returns and its technological predecessor, catalog returns, has been an issue as long as tenants… Continue reading Distorted sales and sales audits
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
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.
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
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