Leases and tenant credit
Leases and tenant credit covers how rental contracts and the strength of the people paying rent shape the value of an income property. Lenders and buyers read both closely.
Readers can settle practical questions about lease abstracts and estoppel certificates. They can see how base rent, expense reimbursements under triple net structures, renewal options and termination rights affect cash flow. Credit topics include investment grade ratings, parent guarantees, security deposits and letters of credit. Rollover risk, weighted average lease term, rent roll concentration and co-tenancy clauses get explained in plain terms. Sponsors, capital raisers, family offices and veteran professionals use those answers to judge whether income is durable enough to support a loan or an equity raise.
- Free Rent and Concessions: Effect on Effective Rent
Free rent lowers the cash a lease produces even when the stated rate holds. This guide works the arithmetic of effective rent, tenant improvements and timing. - Ground Leases: Structure, Rent Priority and Reversion
A ground lease splits land from operating rights, and rent priority, fee mortgage subordination and reversion shape cash flow for landowners and lenders. - Managing Lease Rollover and Expiration Risk
How owners and lenders measure lease rollover risk through expiration schedules, downtime tests, vacancy assumptions and reserves, with a worked example. - Net Leases: Tenant Expenses and Landlord Risk
A net lease shifts property taxes and insurance to the tenant, yet the landlord keeps capped recoveries and collection gaps, plus tenant credit and exit risk. - Reading a Rent Roll Against Actual Income
How a buyer or lender checks a rent roll against leases, concessions, trailing collections and expenses, with a worked example of NOI and the cap rate on price. - Tenant Credit in Single Tenant Net Lease Deals
How to test the rent obligor, remaining lease term and exit risk in a single tenant net lease deal, with a worked comparison of a paying and a failing tenant.