Financial Analysis

Tenant View – Part 4

Tenant Perspective - Part 4 4. Operating expenses Many tenants fail to adequately scrutinize and negotiate the language within the operating expense provision of the lease. If the language is vague or unclear, the landlord may have the right and take the opportunity to charge a tenant for items not included in a previous lease. This could mean an increase in management fees, advertising expenses and parking garage operations, even when the tenant is already paying for parking spaces. Additionally, utilities and basic operating expenses for buildings have been increasing steadily for the past...

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Tenant Perspective – Part 2

2. Playing monopoly The days of 50 to 100 different commercial landlords existing in a given submarket are over. Today, fewer and fewer players have stakes in the ownership of buildings. For example, Douglas Emmett, Inc. (NYSE:DEI) owns 53 percent of the class A office square footage in Woodland Hills, California. With few competitive choices for tenants, a landlord with market share can confidently and rapidly drive rents higher. Tenants can find themselves with only two options: renew and pay more rent, or move out of the market. Click Here for the 3rd factor. For more information or to answer...

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Tenant Perspective Part 3

3. Landlord net operating income With greater competition for key properties, prices are rising. Purchase prices increase, but institutional and private investors still seek to maintain their prior returns on investment capital. The primary goal is to increase revenue. Return is derived from cash flow, principal payments over time, and the ultimate sale of the asset. Net Operating Income (NOI) impacts both cash flow and the value of the asset. Base rent increases are not the only way a landlord can improve revenue. Increased occupancy, parking charges, specialized services including after-hours...

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Tenants Perspective – Five Factors

The goal of this special report on the Five Factors That Could Lead To $5 Rents is to help commercial real estate tenants foresee their future rent or lease exposure and to communicate practical strategies to maintain, or limit increase in the cost of leasing space in the Los Angeles market and throughout the world. Click Here for Part 1 Click Here for Part 2 Click Here for Part 3 Click Here for Part 4 Click Here for Part 5 For more information or to answer questions please contact. Forrest Blake | Senior Vice President SVN | Commercial - DTLA 800 South Figueroa Street, Suite...

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The Ownership Advantage – Analysis of Owning a Office Building Verses Leasing

The Ownership Advantage - Analysis of Owning a Office Building Verses Leasing                     For more information or to answer questions please contact. Forrest Blake  "The Negotiator" Vice President NAI Capital 16001 Ventura Blvd., Suite 200 Encino, CA 91436 818-933-2365 direct 310-850-2381 cell fblake@naicapital.com http://naicapital.com/ www.forrestblake.com

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Blend & Extend Commercial Real Estate Strategy

A tenant usually can renew a lease three years before the expiration date. With rents expected to rise, swift action to capture current rates early can save a company millions of dollars in occupancy costs. On a seven-year lease extension for a 10-year commitment, the savings are estimated to be as high 18%. If a seven-year extension isn't comfortable for you as a tenant, a smart negotiator can work in cancellations at Year Five and Year Seven, reducing your additional commitment to only two years. A penalty will be attached to the cancellation, but it will be a small price to pay to avoid...

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Leveraged Commercial Lease Negotiations

By: Forrest Blake Commercial leasing transaction success is not about doing deals, it is about working deals. Doing is a passive action of processing paperwork that almost always leaves good money on the table. Working a commercial real estate deal means digging in for a good fight that demands your total attention to get your best value. From today forward, I want you to approach every deal with a full commitment to create a comprehensive plan—one that constantly looks for leverage and strategy to satisfy your needs and get the deal done (the way you want). I measure a successful transaction...

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Commercial Office Space Creates Profits

By: Forrest Blake Over two decades I have made representing tenants in commercial real estate a major part of my professional life. I have always questioned the standard method of measuring the success of a commercial office lease transaction based on the rate-per-square-foot. If this was an accurate measurement, then all my professional service clients should have leased warehouse space in Commerce, CA at only $0.45 per square foot. Their rents would be cut by 75%, but likely the same percentage of staff would quit because of the poor working conditions. Yes, I am giving a dramatic example...

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