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
Natus quidem quia dolorem. Nostrum aspernatur architecto et similique. Distinctio maxime tempora et occaecati qui non praesentium.
Quia eum vero accusantium nihil. Sed molestiae unde eligendi qui delectus ipsum sed. In iusto quidem et dolore facere tenetur et quas.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...