Which specifics of a lease effect resale value of real estate?
[deleted]
[{"id": "dz5hjne", "text": "Credit quality of the tenant is first and foremost...", "replies": [{"id": "dz5pnvt", "text": "Followed closely by early termination rights by the tenant. If they can walk, you don't really have anything to sell.", "replies": [], "depth": 2}], "depth": 1}, {"id": "dz5hujj", "text": "Depends on the property type, the term of the lease and the credit of the tenant usually when purchasing a NNN leased asset. \n\nThe cap rate would include most of that info, such as the rental rate ect. \n\nLeases can be tricky if you have more than one tenant. Usually retail leases will include some kind of exclusion policy for larger centers that prohibit the types of competing retail that is allowed. Usually your anchors have a lot of power and it is important to understand that when buying a larger shopping center. \n\nIf you have all your leases rolling over the same time, that is super inconvenient as well, since it gives the tenants a lot more power than if it was structured in a phased roll over. \n\nUnderstanding what the rent bumps are is also important. Sometimes sellers will give sweetheart deals to quality tenants to screw with the cap rate numbers, but diligent buyers often see through those. \n\nIf there is a ground lease in play, those are also undesirable, I want to fully own the property. \n\nIf the lease is poorly worded you are essentially buying a lawsuit, so you want there to be a bulletproof lease that is in favor of the landlord. \n\nAnyway, are you buying or selling or what? ", "replies": [], "depth": 1}, {"id": "dz5kuzk", "text": "Thanks for the reply. I realize the post was difficult without context. I\u2019m spearheading the expansion of my family\u2019s express car wash businesses. Successful one\u2019s require large amounts of prime commercial real estate that are fiercely competitive. Im essentially using this question as a template to understand when a landlord is simply trying to protect his investment\u2019s return based on our lack of credit versus major tenants and when he\u2019s using this as a justification to grossly overcharge us. My educational background is not in real estate, but I have an experienced team I\u2019ve worked with from the start. I just have reached a cap of knowledge and have been seeking more formal real estate information (and licensure) for my own benefit", "replies": [{"id": "dz5ysp0", "text": "so with this business, are yall ground leasing real estate and then building the car was on site?", "replies": [], "depth": 2}], "depth": 1}, {"id": "dz5lkj6", "text": "It all matters. Price, term, options, security deposit, tenant credit worthiness, coporate/personal gurantee, landord/tenant responsibilities, and so much more. It would be best to see a copy of the original lease as to properly value a property. ", "replies": [], "depth": 1}, {"id": "dz5x4ht", "text": "Options to extend can also be a negative factor if the property is poised for redevelopment. ", "replies": [], "depth": 1}]