The initial loan-to-value ratio is low and declines over time as base rents
are paid, allowing the property to withstand a significant fall in value before note holders are impacted.
Income and base rents
are rising, a possible sign of partial economic recovery for the commercial real estate market despite similar rises in expenses.
Driving the growth of this strategy in New York City is a gamble that landlords will ultimately make more money through percentage renting down the road, even if they offer lower base rents
now to lure tenants, Breslin said.
Not only has this strategy worked, it has often allowed the landlord to achieve higher base rents
The company also has a manageable lease expiration schedule, with no more than 13% of annualized base rents
expiring in any year over the next seven years.
8%) represent in aggregate just under 20% of annual base rents
, Fitch is comforted by the fact that it rates two of top five tenants, investment grade and the top three grocers have performed well in this competitive environment.
This is because the rent control tenants will be having Maximum Base Rents
(MBR) approved next spring.
The company also has a manageable lease expiration schedule, with no more than 12% of annual base rents
expiring in any year over the next ten years.
are off by 20 percent or more in the past year and workletters have increased to $50-60 per square foot, along with other concessions.
Moreover, the tenant roster is very diverse with limited industry and company concentration as the top 10 office tenants comprise only 14% of annualized base rents
, while the top 10 industrial tenants comprise only 7% of annualized base rents
4% of annualized base rents
(General Services Administration).
In addition, the company also has a manageable lease expiration schedule, with an average of 10% of annual base rents
expiring over the next three years.