Know the Land!

Factors to Consider

A - Characteristics of the Property

1 - Property Description

2 - Boundary Survey

- Size of Property

- Shape of Property

3 - Condition of Title:

- Appurtenances

- Encumbrances

4 - Deed Restrictions or Covenants

5 - Mortgages, Liens Outstanding

6 - Existing Easements or Rights of Way

7 - Joint Driveways or Uses

B - Availability and Capacity of Utilities

1 - Water

- Public

- Well

- Quality

2 - Sewer

- Public

- Septic

- Lift station

- Percolation Test

3 - Electricity

4 - Gas

5 - Local Moratoriums

6 - Tap or Tie-in Fees

C - Environmental Analysis

1 - Phase I, Phase II Audits

2 - Flood Areas

3 - Wetlands

4 - Tree Preservation

5 - Topographic Survey, Topography

6 - Terrain

7 - Soil, Rock, Geological Issues

8 - External Issues, Noise, Land Fill, Flight Path

9 - Endangered Species, Plant and Wildlife

D - Regional Characteristics

1 - Projected Growth Patterns

2 - Road Plans

3 - Adjoining Land Uses

4 - Availability of Public Services

- Public Transportation

- Schools

- Emergency Service

E - Regulatory Issues

1 - Zoning Ordinances

2 - Subdivision Codes and Restrictive Covenants

3 - Permitting Process and Approvals

4 - History of Approvals

5 - Attitude of Community and Approval Board

6 - County and City Master Plan

7 - Application and Plan Submittal Process

8 - Time Frame for Entire Approval Process

F - Extraneous Costs

1 - Impact Fees

2 - Real Estate Taxes

3 - Pending Assessments

G - Acquisition/Development Decision

1 - Cumulative Review of Research

2 - Review of Competitive Market

3 - Secondary Review of Finalized Development Concept

4 - Verification of Appropriate Financing

5 - Re-Negotiations

6 - Determination of the Total Cost of the Project or Land

7 - Required Contingencies

8 - The Buy/No Buy Decision

- Limitations

- Maximum Cost factors

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Commercial Lease Checklist

______ Parties: Landlord (Lessor) and Tenant (Lessee)

______ Date (Commencement, Possession, Rental Commencement, etc.)

______ Property Description (Demised Premises)

______ Term

______ Rent (Base Rent, Additional Rent)

______ Use Of Premises

______ Maintenance & Repair Responsibilities of Landlord

______ Maintenance & Repair Responsibilities of Tenant

______ Common Area (Tenant's Proportionate Share)

______ Additional Rent(S)

______ Utilities (Type, Capacity, Costs, Billing)

______ Default & Remedies (Landlord/Tenant)

______ Rent Escalations (Index, Formula)

______ Options To Renew

______ Construction & Alterations

______ Insurance (Base Year, Increases or Total Pro Rata Share)

______ Taxes (Base Year, Increases or Total Pro Rata Share)

______ Termination/Cancellation

______ Destruction Of Premises

______ Eminent Domain/Condemnation

______ Rules & Regulations (Attachment)

______ Subordination/Nondisturbance

______ Signage

______ Contingencies (Permits, Financing, etc.)

______ Security Deposit

______ Purchase Option / ROFR

______ Special Stipulations / Miscellaneous

______ Short Form / Memorandum

______ Signatures / Acceptance

______ Brokerage Commission

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Commercial Leasing II Sample Lease Clauses

Sample 1 - Holding Over - Tenant at Will

"If tenant remains in possession of the premises after expiration of the term of this lease, with landlord's acquiescence and without any express agreement of the parties, tenant shall be a tenant at will at the rental rate in effect at the end of the lease, and there shall be no automatic renewal of this lease."

Sample 2 - Holding Over - Estate at Sufferance

"Lessee shall not remain in possession of the within leased premises after the expiration of this lease. Any holding of the within leased premises by lessee after the expiration of this lease without a written renewal thereof or written consent from lessor or lessor's agents, shall not constitute a tenant-at-will interest in behalf of the lessee; but lessee shall become a tenant at sufferance. There shall be no renewal whatsoever of this lease by operation of law."

Sample 3 - Holding Over - Estate From Period to Period (Periodic Tenancy)

"If tenant should remain in possession of the premises after the expiration of the term hereof and without executing a new lease, then such holding over shall be construed as a tenancy from month-to-month, subject to all conditions, provisions and obligations of this lease insofar as the same are applicable to a month-to-month tenancy."

Sample 4 - Subordination Paragraph

"Within five (5) days following request of landlord, tenant shall subordinate its rights hereunder in writing to the lien of any mortgage or security deed or the lien resulting from any other method of financing or refinancing now or hereafter placed upon the land and/or buildings of which the premises are a part and to advances made or hereafter to be made upon the security thereof."

Sample 5 - Request for Non-disturbance

"If at the time of execution of this lease there are any existing mortgages, liens or encumbrances against the premises, lessor shall promptly cause the mortgagees, lienholders or other secured parties to execute a non-disturbance agreement, approved in form and substance by lessee, providing that such holder will recognize lessee's lease of the premises and will not disturb the lessee's quiet possession of the premises as long as lessee is not in default of any of the provisions of this lease. Rental payments set forth in section 4 shall not commence until lessee has received the executed non-disturbance agreements."

Sample 6 - Clause Requiring Estoppel Certificates

"Tenant agrees at any time, and from time to time, upon ten (10) days' prior request by the landlord, to execute, acknowledge and deliver to landlord a written statement certifying that this lease is unmodified and in full force and effect (or if there has been modifications, that the same is in full force and effect as modified and state the modifications), and the dates to which the minimum rent and other charges have been paid in advance, if any, and confirming tenant's acceptance of the premises, the commencement of the term hereof, and the rent provided under the lease, it being intended that any such statement delivered pursuant to this subparagraph may be relied upon by any prospective purchaser, mortgagee or assignee of any mortgagee of the premises or the shopping center."

Sample 7 - Recordation, Short Form

“Landlord agrees, upon tenant’s request, to execute a short form of this lease, entitled memorandum lease. Tenant may record such short form lease at its expense. The provisions of this lease shall control, however, in regard to any omissions from said short form, or in respect to any provisions hereof which may be in conflict with such short form.”

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Sample 8 – Lease Memorandum

Sample Memorandum Lease

This Memorandum Lease, made and entered into this _______ day of 20__,

by and between _______________________________________ , hereinafter

referred to as ‘Landlord’, ________________________________________ , a

__________________ corporation with its principal office in Anywhere City,

Basic County, U.S.A. hereinafter referred to as ‘Tenant’.

Witnesseth, that:

1. The Landlord, in consideration of the rents reserved and agreed

to be paid by Tenant, and of the covenants, agreements, conditions and

understandings to be performed and observed by Tenant, all as more fully

set out in a lease executed by Landlord and Tenant, and dated __ day of

______________, 20 __, hereby lets, leases and demises to the Tenant a tract

of land and all improvements with all easements and appurtenances thereon

lying and being ___________________________________________________

_______________________________________________________________

which property is more particularly described on schedule a attached hereto.

2. The term of this lease shall commence on the date of the lease

above and terminate ___________ (____) years, after the date as determined

by the provisions of the above referred to lease agreement.

3. The Tenant, may, at its option, and by giving written notice to the

Landlord _________________ (____) days prior to the expiration of this

lease, extend this lease for __________________ (____) additional terms of

____________ (____) of _______________________ (____) years each.

4. This Memorandum Lease is subject to all of the terms, conditions

and understandings set forth in the above mentioned lease between the

Landlord and Tenant, which agreement is incorporated herein by reference

and made a part hereof, as fully as though copied verbatim herein.

In witness whereof, the parties hereto have caused this Memorandum

Lease to be duly executed as of the day and year first above written.

Official Witness: Landlord Name

_______________________________ By:_____________________________

_______________________________ Its:_____________________________

Witness: Tenant Name

______________________________ By:______________________________

______________________________ Title:_____________________________

Sample 9 - Base Year Sample

"Commencing with June 1, 1991 of the term and continuing annually for the term of this lease, lessee shall pay lessor an amount equal to the difference in operating expenses, (as defined in this lease), for the preceding two calendar years. For purposes of this lease, the base year shall be 1989. Tenant's share of the building expenses shall be 11.70% of the total building operating expenses."

Sample 10 - Pro Rata Definition

"Tenant's "pro rata share" shall mean the product obtained by multiplying the costs of common area maintenance by a fraction, the numerator of which is the total number of square feet of the premises, and the denominator of which is the total number of rentable square feet of the shopping center."

Sample 11 - Example of Calculating a CPI Increase

Given: Rental is $4,200 per month ($50,400 per year)

Annual increases are done on the anniversary date of the lease, which is June 15,

simple increase.

The CPI is the June CPI-U, U.S. City average, All Items

published monthly, Base Year 1982-84=100.

June 1995 CPI-U is 152.4

June 1996 CPI-U is 156.7

Problem: What is the increase for the next year, and how much is the

total annual and monthly rental for the next year ?

Solution: June 1996 CPI - June 1995 CPI / June 1995 CPI = percent increase

156.7 -152.4 = 4.3

4.3 / 152.4 = 2.8 % increase

$ 50,400 x 2.8% (or .028) = $ 1,411.20 per year increase

$ 1,411.20 / 12 = $ 117.60 per month increase

$ 50,400 per year x 102.8 % = $51,811.20 per year new rental

$ 51,811.20 /12 = $ 4,317.60 per month new rental

Sample 12 - CPI Clause:

"The annual marketing fund contribution shall be adjusted, as of the first day of each calendar year during the term of this lease, by the greater of (a) seven percent (7%) or (b) the same ratio as the Consumer Price Index, Wage Earners and Clerical Workers, All Items, (Houston, TX), 1982-84=100 ("CPI”), as most recently published on October 1st of the prior year has changed compared to the CPI for the October prior to the rental commencement date of this lease."

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Sample 13 - Lease Summary Sheet

Date Lease Signed: _ _

Landlord: _

Tenant:

(#.# refers to the paragraph number in the lease concerning that topic.)

1.1 Building Name: Floor: Suite: ______

address: _____________________________________________________________

_____________________________________________________________

1.2 Rentable Area of Premises: square feet

1.3 Tenant's Percentage Share: per cent

2.0 Term: years

2.3 Commencement Date: _______________________

Expiration Date: ___________________________

3.0 Initial Rent: $____ ___ per year (__________ per square foot per year)

$______________ per month

4.1 Rental Adjustments During Initial and Extended Terms:

Adjustment Date: Adjusted Basic Annual Rent:

$ ($ per square foot per year)

Other:

4.5 Base Year for Initial Term:

6.3 Options to Extend Term: year option(s)

6.5 Base Year for Extensions of Term:

9.1 Addresses for Payment of Rent and Notices:

Tenant: Landlord:

Management Co.: __________________ Broker:

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Residential Subdivision Development Project Costs: General Checklist

Land Cost
Land Interest
Environmental Study
Appraisal
Closing Costs

· Title Policy

· Recording Fee

· Attorney Fees

· Interest

· Insurance

Loan Request Terms:

· Term

· Rate

· Sales price of Lots

· Loan Value to Sales Price

· Lot Release

Function of Loan Amount: Loan Origination Fee
Function of Total: Management Fee
Zoning Fees
Engineering
Development Permit(s)
Clearing & Grubbing
Grading
Rock
Sanitary Sewer
Storm Sewer
Curb & Gutter
Asphalt & Base
Erosion Control
Rip Rap
Water Main
Trench Rock Water Line
Water Laterals
Water Taps
Fire Plugs
Underground Power
Street Lights
Street Signs
Signs
Entrance & Landscaping
Home Owners Association & Entrance Maintenance
Underground Sprinkler System
Recreation/Amenities
Contingency/Reserves

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Space Comparison Survey Form, Locating The Right Space For A Tenant Client

(This sample checklist applies primarily to light industrial space)

1 - General Property Information

Name

Address

Bay Or Suite

2 - Quoted Lease Rate

· Determine Rates Of Other Tenants For Comparables

· What Type Of Lease Structure

· Detail Additional Charges, Cam, Water, Etc.

3 - When Space Is Available

4 - Vacancy Factor For Building And Center

5 - Location: Access And Convenience:

Restaurants

Shopping Facilities

Freeway Access

Proximity To Airport, If Important To Tenant

Public Transportation

6 - Property Characteristics: Industrial

· Size, Number Of Buildings And Bays

· Ceiling Heights

· Sprinkler System

· Dock High Doors

· Drive In Doors

· Rail Access

· % Office

· Parking Spaces And Ratio

- Number

- Location

- Lighting

· Power Services And Capacity

· Land Area And Building Coverage

· Year Built, Age

· General Zoning

· Construction Type

Exterior:

· General Appearance

· Landscaping

· Walkways And Driveways

· Condition Of Improvements

· Parking Lot Surface Condition

· Material Of Exterior (High/Low Maintenance, CAM Charges)

Interior:

· Reception Area

· Hallways

· Walls

· Ceilings

· Flooring

· Shop Area/Warehouse

· Stairs

· Elevators (#)

· Escalators (#)

· Overall Condition

7 - Signs Of Declining Management:

· Broken Systems

· Broken Signs Or Glass

· Parking Lot Or Driveway Pot Holes

· Obscure Stripping

· Hazardous Cracks

· Leaking Roof Or Evidence Of Ponding On Roof Or Walkways

· Clogged Gutters Or Down Spouts, Etc.

8 - Environmental Concerns On The Subject Or Adjoining Properties:

· Visible Trash/Waste

· Chemical Drums

· Paint Booths

· Hydraulic Lifts

· Storage Tanks Above/Below Ground

· Asbestos

· Other Tenant Usages And Waste Disposal

9 - Neighborhood Composition:

· Heavy Or Light Industrial

· Commercial, Retail

· Multifamily, Residential

10 - Age And Condition Of Nearby Developments:

Area Of Growth And New Development

Area Of Stagnant/ No Growth

Declining Investment Potential

Demographics For Area, As Applicable.

11 - Overall Rating of the Property Relative to Comparables

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