Identifying and measuring business enterprise value for regional shopping centers

Article Abstract:

Business enterprise value (BEV) is the difference between the market value derived from rentals of spaces in real properties as operating income, and the market value of the real property itself plus other tangible properties within it. Regional shopping centers contain anchor department stores with 300,000 to more than 1,000,000 square feet of space. Factors such as who owns, operates, manages, and occupies the space of these kind of centers affect the centers' BEV. Rentals are expressed as percentages of tenant retail sales, while base rentals are expressed as percentages of projected tenant retail sales levels.

Methods, Valuation

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What every retail landlord should know about negotiating "go dark" clauses

Article Abstract:

Landlords must carefully undertake the negotiation on continuous operation or go dark clauses because the profitability of shopping centers depends on the tenants' continued operations and sales from their premises. In the go dark clause, the tenant may discontinue its business regardless of breaking lease agreements. When breach of contract occurs, the tenant may consider terminating the leasing contract and file a case against the tenant for damages such as decreased percentage lease and diminished value of the shopping center.

Management, Contracts, Landlord and tenant, Landlord-tenant relations, Breach of contract, Building leases

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Credit lease securitization: the new wave of shopping center financing

Article Abstract:

The securitization of tenant lease receivables is an important development in financing of shopping center construction projects. Under this scheme, securities are rated based on the credit standings of tenants and the sizing of the securities are computed on the net present value of anticipated rental income. The $500 million securitization of Kmart stores as processed by the DR Structured Finance Corp. is discussed.

Finance, Commercial leases

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