Retail Guys: What are you bumping for lease expirations?
I got a tenant with a lease expiring. Trying to do a long-term lease here. Theres no extension options. Out of curiosity, how are some you doing this? Just matching market rate? bumping a set %?
Also what are you doing for new annual increases? Typically we've been at 2.5%-3% annual.
Term? Current Rent vs Current Market?
Call it 15 years i do 5% increases every 5 years to be conservative. I'd also bring up their new rent to market or whatever they pay now. Whichever is higher
May also be able to push a bit more if you offer some kind of TI package depending on your capital and the tenant's needs. Annual increases in the 2.5-3% range definitely make sense on smaller shop/inline leases with 5% every 5 years on bigger boxes. Does the tenant report sales? You can also calculate their health ratio to get a sense of what they might be willing to pay
Bring them to market rate if they don't have an option.
Have done a bunch of retail renewals over the last couple years, the standard seems to be 3%. Maybe 2-2.5% if a 10 year lease or longer
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