Evaluating Commercial Leases: The Tenant and the Terms Both Matter

Learn how the terms of a lease and the risk profile of the tenant influence the valuation of commercial real estate. You will see how the business features of commercial leases affect the quantity and the duration of the income stream that a property generates and how the property’s income statement is developed. Non-traditional sources of income, the proper period to use in measuring the income, measuring the real vacancy rate, expenses that might not be recoverable
by a landlord if a CAM formula is incorrect, and how other special clauses in a lease can all affect the property’s income stream will be examined. The second part of the seminar discusses tenant credit risk issues and explains why understanding a tenant’s financial strength is key to assessing the quality of the income stream.