We are working on renewing a Dollar Tree lease that’s a tenant in a center we purchased last year. The tenant occupies 17,089sqft and currently pays $6.00/sqft They have proposed a 5 year extension at $6.50/sqft with 4 months of free rent along with us helping replace one of the HVAC units that is becoming old and experiencing issues. Here is what we are countering them… PPSF: $6.50 Free Rent Months: 0 TI Allowance for HVAC: $15,000 One 5-Year Option at $8/sf The counter terms would result in a a Net Effective rent of $6.32/sf. Once we factor in our leasing commission of 2% ($11,107) and the $15,000 of TI it brings our net effective rent per square ft over the 5 year term to $6.19 This makes this lease worth $1,322.261 at an 8 CAP rate and we lock in this tenant for another 5 years securing rent of $544,284. In commercial, all of the value comes from the lease its terms. Know your leases!

Last week I started Part 1, Financial Analysis for Commercial Real Estate, out of the 4 part curriculum on commercial real estate. As I go through this course i'm going to be sharing information that I think will be... 1) Valuable to others knowledge arsenal and 2) Actionable items that you can apply to your investing strategy/ portfolio. https://www.ccim.com/