Chapter 22 Leases and Property Types REAL ESTATE FIN 331

Essential Elements of the Lease A. The names of the landlord and tenant B. The description of the leased premises C. An agreement to transfer possession of the property D. The start and end dates of the agreement

Essential Elements of the Lease E. A description of the rental payments F. The agreement must be in writing G. The agreement must be signed by all parties

Negotiated Lease Provisions A.Use of the premises B.The lease term to include an allowance for tenant improvements C.Magnitude of the rental payments D.Responsibility for operating expenses E.Any concessions to be made by the lessor

Negotiated Lease Provisions E. Ability to assign or sublet the lease F. Renewability of the lease G. Cancellation option H. Advertising and signage I. Parking J. Subordination and non disturbance

RESIDENTIAL RENTAL PROPERTIES AND LEASES A. Common lease provisions 1.Lease term 2.Condition of premises 3.Responsibility for utilities 4.Rules and regulations

Office Properties and Leases A.Class A properties: command higher rents because of location, desirability B.Class B properties: command lower rents Class A properties

Office Properties and Leases C. Defining rentable space 1.Usable area: Square footage of the bounded space 2.Rentable area: usable area plus a prorated share of the common areas D. Common lease provisions 1.Lease terms 2.Expense Stops

RETAIL PROPERTY CHARACTERISTICS A.Shopping Centers 1.Strip malls 2.Shopping centers 3.Regional malls 4.Outlet centers B.Defining leasable area 1.Gross Leasable Area 2.Gross Floor Area

RETAIL PROPERTY CHARACTERISTICS C. Anchor Tenants: large department stores usually found at the corners of regional malls D. Percentage Rent Clause: when rents are related to the tenant’s gross sales E. Use Clauses F. Hours of Operation G. Common Area Maintenance

INDUSTRIAL PROPERTIES A. Types of Properties 1.Single user buildings 2.Warehouses and Self Storage facilities 3.Multitenant industrial parks B. Tax-free zones 1.Industrial parks special tax breaks

HOMEWORK ASSIGNMENT A.Key terms: Anchor tenant, Cancellation option, Concessions, Percentage rent, Rentable area, Sublease, Tenant improvement allowance, Usable area B.Study Questions: 4, 5, 6