Blog Archives
Part 11 – last Article blog
11. Lender issues: Landlords will frequently reject tenant’s suggested lease modifications because they would impair the “financeability” of the property, so the tenant must understand lender concerns. In general, the lender’s primary concern is the assurance of uninterrupted cash flow; anything that might jeopardize cash flow will be carefully scrutinized. Sensitive lease provisions generally include tenant remedies such as rent abatement, offset rights (deducting damages against rent) and lease termination rights.
Successful negotiation means more than just the rent As noted above, each step of the commercial lease process and each provision of the lease agreement provides ample opportunity to improve the deal, and conversely, expose the landlord or tenant to costly and unnecessary expense. The successful negotiation will focus on more than just rent. By reducing risks and avoiding surprises, the frantic calls for help may be a thing of the past.
Rent: Just One Side of a Commercial Lease Agreement
My blogs for the next week or so will contain excerpts from an article I co-wrote for the ACC Docket, November 2010 edition, titled “Rent: Just One Side of a Commercial Lease Agreement.” The discussion contained in the article was written for corporate lawyers, but applies to a much wider audience as it describes the importance of careful planning and analysis throughout the leasing process, and also emphasizes the need for the tenant to focus on each provision contained in the definitive lease agreement. A successful lease negotiation focuses on more than just the base rental amount, as vital components of reducing a company’s occupancy costs include mitigating risks and exposure to unforeseen expenses, maximizing flexibility and operating efficiencies, and aligning the company’s real estate strategy with its overall business plan.
I hope these postings will be enjoyable to read and informative. Feel free to call or email, and we’ll show you why we’re Studley!
Will Smith video on Success
I really liked this video and wanted to share it with others. I hope you enjoy this as much as I did!
Negotiating the lease deal
It is amazing how often companies find themselves looking for guidance because an unpleasant surprise has come up during the term of their lease, with the vast majority of such issues costing them significant dollars (that wasn’t included in their budgets) in attorneys’ fees and costs to remedy the situation. Often such surprises are due to having signed a poorly understood or poorly constructed lease agreement and could have easily been avoided. This is especially true of smaller, less sophisticated tenants who, for whatever reason, sign the landlord’s “Standard Form Lease” with few, if any, changes.
A lease is much like a partnership agreement in that it governs a business relationship that could last for many years. When everything goes as planned, most leases will serve the parties well but the true test occurs when there are hiccups in the relationship. If the lease has not been carefully drafted, a hiccup can become a major problem. Tenants often lose sight of the fact that the “Standard Form Lease” represents the landlord’s wish list, and if not appropriately modified, will likely not serve their interests when issues arise.
Most tenant rep firms do not fully protect their clients throughout the entire leasing process, as achieving a favorable deal includes the careful negotiation of the definitive lease agreement. This is where our Studley team differs from the rest. We’d be happy to show you why we’re Studley!
U.S. Rating Outlook Cut to Negative by Fitch
Treasuries Outperform
Debt to GDP
Deficit Reduction
Reserve Currency
Marketable Debt
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- Fitch keeps AAA U.S. credit rating but dims outlook (usatoday.com)
- Fitch revisits outlook on debts tied to US rating (seattletimes.nwsource.com)
- Fitch warns of U.S. downgrade if no budget deal by 2013 (business.financialpost.com)
- Fitch Downgrades Outlook on U.S. Sovereign Debt (businesslawdaily.net)
- Fitch Lowers Outlook On U.S. Credit Rating (huffingtonpost.com)
It’s official: Target taking over Tamarac Square in Denver
Southeast Denver‘s Tamarac Square will be razed and replaced by a Target store and other retailers, Developers Diversified Realty Corp. announced today.
The Beachwood, Ohio-based firm characterized Tamarac Square as a “non-income producing parcel” that will be sold to Target for construction of the store.
Developers Diversified said it intends to redevelop adjacent retail space to accommodate “demand for additional high-quality retailers.”
The company, which owns and manages approximately 520 retail properties around the country, said it is also razing the Terrell Plaza Shopping Center in San Antonio and selling that property to Target.
“The redevelopment of the two non-income producing assets into prime shopping centers is a perfect example of the continued execution of our redevelopment strategy,” said Paul Freddo, Developers Diversified’s senior executive vice president of leasing and development.
Freddo said that Tamarac Square is currently 90 percent vacant.
The redevelopment will provide Target access to a market exceeding 720,000 people within a seven-mile area, said Freddo.
He said that upon completion of the 135,000-square-foot Target store and the renovation of the adjacent 33,000 square-foot convenience center, the project will be 98 percent leased.
The combined gross investment for the Denver and San Antonio projects is $40 million, according to the company.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com.