The head lease Officer (CLO) of Arthur Hill & Company prepared Sunrise Atrium (a commercial property in the portfolio of the company) to sell. Currently, many of the tenants of the building had long-term leases, which had been signed time to run, but well below the market rates. The CLO assumed that the majority of potential buyers of Sunrise Atrium would the cap rate method of valuation that made the future net operating income (NOI) is an important component of valuati use … Read more »

The head lease Officer (CLO) of Arthur Hill & Company prepared Sunrise Atrium (a commercial property in the portfolio of the company) to sell. Currently, many of the tenants of the building had long-term leases, which had been signed time to run, but well below the market rates. The CLO assumed that the majority of potential buyers of Sunrise Atrium would the cap rate method for assessing the future to use the Net Operating Income (NOI) is an essential part of the assessment and therefore the selling price. To enhance the value of the building, the CLO was considering offering a “rent holiday” to selected tenants as a way of raising some leases at market rates. To determine whether it makes business sense, the CLO identified the key success factors in the selection of tenants entitled to the leave and the duration of the holiday. His goal was to develop a lease reconfiguration plan that would add value for investors.
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from
Krishnamoorthy Srinivas,
Peter C. Bell
Source: Ivey Publishing
4 pages.
Publication Date: Nov 18, 2010. Prod #: 909E12-PDF-ENG
Arthur Hill & Company Realty Services HBR case solution