Lecture_400X_Leases

Lecture_400X_Leases - Introduction to Income-Producing...

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Introduction to Income-Producing Properties: Lease Fundamentals
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Leases are the primary source of income to property owners Q: What is a lease? A: A Contract between lessor (owner) and lessee (tenant)
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Some types of information found in leases: Occupancy date, rent due date, length of lease Description and measurement of leased premises Allowed uses/business operation restrictions Restrictions on alterations or improvements Responsibilities for maintenance and repair of leased space Restrictions on subletting Use of common areas and facilities Responsibility of payment of specific expenses Non-compete/non-dilution clauses Any concessions Renewal options Base rent and methods of calculating additional rent And more…
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Basic Lease Types Gross lease (AKA a “full service” lease): Landlord pays all operating expenses Net Lease : Tenant pays all operating expenses in designated categories Gross Lease with Expense Stop : Landlord pays operating expenses up to a certain amount (the “stop”). Tenant pays expenses above the level of the stop.
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This note was uploaded on 06/08/2011 for the course BUAD 400x at USC.

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Lecture_400X_Leases - Introduction to Income-Producing...

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