Just thought of this as I was underwriting a property today. If the CAM budget is already fully recovered by the NNN tenants, if you have a mezz space rented, its just pure gravy to your bottom line, since there are essentially no expenses on that space.
In that case, if you can sell the "idea" of the gross rent on that mezz space being Net Rent + Additional Rent = Gross Rent, then you're in the absolute money zone. You're essentially "over-recovering" your expenses on that space.
Only downside is that the other NNN tenants might have higher additional rents.
What are you trying to say in your second paragraph? Not sure where you’re going with “selling an idea of gross rent = net + additional” - is this just a confusing way to say “if you can convince 99% of your tenants to pay all projected CAM in recoveries, then the 1% left is all profit”? I mean yeah, sure.
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