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Coping with Marketplace Shifts 

With the economy no longer on a long term growth trajectory, retail real estate users and providers must reassess how they do business. Several significant changes already have occurred. For example, lenders are now more actively involved in transaction approval.

Counting Leases Before They Hatch 

The accounting profession is currently evaluating a proposed new standard that promises to fundamentally change the ways landlords and tenants account for — and negotiate — leases. Under review is a proposed rewriting of the Financial Standards Accounting Board’s Accounting

Industrial Leasing Insights 

Commercial Investment Real Estate asked industrial real estate experts nationwide to share the biggest leasing challenges in their markets and strategies they are using to secure deals. Here’s what they said Kansas City, Mo.Greatest challenge The ownership over leasing paradigm

Lease Option or Installment Sale? 

A lease with an option to purchase, also known as a "lease option," is a common real estate arrangement. The important income tax question in lease option transactions is whether the tenant is leasing the property or, as an economic

Beyond the LOI 

Landlords in this anemic leasing market want to act quickly to get leases signed and rent payments started. Economic instability brings fresh urgency to the need for increased occupancy. But delays and roadblocks can slow the process and frustrate a

Net-Leased Single-Tenant Risks 

Net leased single tenant is the most sought after property type for investors seeking lower management intensive products, fewer owner costs, and stable monthly incomes. While net leased single tenant properties have always been favored by individual investors, in many

Lease Option or Sale? 

Editor’s note This article, which originally appeared in Commercial Investment Real Estate, July August 1996, is one of the most popular articles downloaded from the CIRE archive. Here is a condensed version of the original article. Make better occupancy decisions

Lease Buyout Decisions 

Making decisions in commercial real estate often involves more than just calculating a capitalization rate or net present value, because there is always a component of unknown risk. In the office leasing sector, risk is created by local market factors,

Evaluating Creditworthiness 

 

Affordable Green Leasing 

The article “Not Easy Leasing Green” (CIRE, September October 2012, p.36) told an unpopular truth. It tallied a long list of hurdles confronting tenants and landlords who pursue Leadership in Energy and Environmental Design certification. This situation helps explain why

The Potential Impact of Lease Accounting Changes on Corporate Real Estate Decision-Making 

The Financial Accounting Standards Board and the International Accounting Standards Board aim to create a unified set of lease accounting standards as part of a larger global convergence initiative. With the goal of improving lease information transparency and comparability, the

To Lease or not to Lease? 

A principal goal of corporate management is to make a business worth more than the cost of its underlying assets. To create such shareholder wealth, management has three levers at its disposal asset efficiency, operating efficiency, and capital efficiency. Asset

Risky Business 

Moving forward, investment risk does not center on how likely a tenant is to default within 12 to 18 months, which is the general timeframe of a corporate credit rating. The concern is how likely the lease contract is to perform over its entire life, which may be 10 years or longer. Most businesses that rely heavily on real estate in their day-to-day operations prefer leasing to ownership for managing their real estate locations. Among the many reasons for this preference are the cost of capital and corporate flexibility.

Office Leasing Trends 

What key points attract nonprofit tenant interest? As traditional office tenants undergo a seismic shift in their space-using habits, office leasing professionals realize that less-well-known tenant groups, such as nonprofit organizations, are coming to the fore as office space users. Nonprofit organization

How Much Space Do We Need? 

No company ever seems to have the right amount of office space. Firms grow and shrink throughout the years for many reasons however, they must contract for space over a set lease term of five, 15, or even 20 years.

Ground Control 

Editor's note Originally published in 2006, “Ground Control" is one of the most popular articles in CIRE's archive. Author Philip “Fred” Himovitz updated the article for republication. Commercial real estate developers and investors often favor total fee ownership of income

NPV Review 

One of the most useful economic decision making tools for commercial real estate users and investors is discounted cash flow analysis. The first step in the DCF process is to reduce each alternative being analyzed to the amounts and timing

Ground Control 

Commercial real estate developers and investors often favor total fee ownership of income property. The propensity to own and the emotions attached to it sometimes can result in misguided decisions and strategies and lost opportunities. Relinquishing ownership of income property

Leasing Lessons 

Analyzing commercial real estate leases in today's rapidly changing marketplace is a daunting task. But if performed properly, this process can have a very important economic impact on landlords, owners,

Smart Leasing Strategies 

Free rent or increased tenant improvement allowances? Long term leases at fixed rates or short term leases with rights to expand? Landlords all over the country are trying to determine the magic combination of terms and rates that will entice

Triple-Net Effects 

A prime advantage of commercial real estate ownership is the inflation hedge it creates. By periodically raising rents, real estate owners can keep pace with inflation and preserve the purchasing power of their rent dollars. However, when leases fail to

Got Space? 

Experts agree Tenants rule the commercial real estate market. Occupancies across all property types either continue to slide or are stagnant, and many brokers don't expect relief until next year. “Now is a great time to be a tenant,” says

The GSA Way 

The General Services Administration probably is the largest U.S. tenant, providing space for more than 400 federal government agencies, bureaus, and commissions with more than 1 million employees and contractors. At the end of its fiscal year 2010, GSA’s leased

Redefining GSA Leases 

While few see an upside to the down economy, this turbulent cycle has prompted many commercial real estate companies to evaluate the efficiency of their business processes. The federal government is no exception. Earlier this year, the U.S. General Services

Negotiating With the GSA 

When it comes to lease negotiations with the General Services Administration, the federal government’s real estate division, commercial real estate professionals must be prepared. Offerors – those who respond to GSA’s solicitations for space – must read solicitation and lease