| In commercial real estate, it is essential to | | | | amenities to the property will always create |
| maintain accurate market rental information. As | | | | differences in rental profile. In retail property, |
| the property market shifts and changes, the | | | | passing foot traffic will also have impact on the |
| levels of rental and incentive also shift and change. | | | | rental levels. In this case, seek to understand the |
| The sharing of rental information between | | | | access points to the property and where most of |
| commercial real estate agents is therefore a | | | | the foot traffic passes. Take particular care to |
| productive process and a key element of market | | | | note that this will change at different times of the |
| intelligence. | | | | day and on different days of the week. |
| Rentals in commercial real estate and investment | | | | 5. When comparing rental information with other |
| property will typically be either net rental or gross | | | | leases it is wise to seek a copy of the other |
| rental. There are also variations in which these | | | | lease documentation where possible. In only this |
| rentals can be applied to the particular lease and | | | | way can you fully understand the original |
| the relevant property. | | | | occupancy circumstances of any potentially |
| Given that each lease is unique and different, it is | | | | comparable tenancy. |
| critical that you investigate the full elements of | | | | 6. When the new lease situation is created, the |
| the rental and lease details you come across in | | | | relevant tenancy can be given an incentive from |
| each and every case. | | | | the landlord. This can be in the form of a rent |
| This will mean the following: | | | | free period, landlord funded fit out, landlord cash, |
| | | | and discounted rental. This will impact the rental |
| 1. The date on which you acquire the information | | | | established at the time of lease commencement |
| is fundamental to your record keeping process. | | | | and should be removed from that lease structure |
| 2. The date on which rental information has been | | | | when you are comparing tenancies across |
| struck is relevant to the market only at that | | | | different properties and or locations. |
| time, hence that date is critical to your analysis | | | | 7. The presentation levels achieved in a retail |
| and assessment. | | | | tenancy will have immediate impact on the levels |
| 3. The source from which you gathered the | | | | of trade. The levels of trade will always impact of |
| information must be recorded and checked for its | | | | the rental paid. This is another reason to inspect |
| validity. At first glance, the rental information may | | | | comparable tenancies and compatible properties |
| appear accurate, although further information may | | | | before you accept the rental as being relevant to |
| discount the relevancy. When you rely on this | | | | your market rent investigation. |
| information in a rental dispute process, the validity | | | | 8. In a retail property, the days on which the |
| and accuracy of rental records and benchmarks | | | | property trades to the local community will also |
| cannot be overstated. Any property valuer that is | | | | impact the rental. Any comparable properties in |
| appointed to resolve the dispute will seek | | | | your market rental assessment should trade |
| evidence from you on the source of your | | | | under similar circumstances and times of the day. |
| information. In this case, the more information | | | | 9. The levels of outgoings that are paid in each |
| you have the better it is to support your | | | | and every lease can be potentially different. This |
| argument. | | | | is another reason to read the leases before the |
| 4. The location of comparable rentals and | | | | rentals are considered directly comparable. |
| tenancies in other properties should be inspected | | | | In summary, the gathering of market rental |
| before they are considered directly comparable. | | | | information in a commercial or retail investment |
| This means that the details of the rental alone are | | | | property is an important task that requires |
| not sufficient in the first instance. Comparable | | | | dedicated focus. Pay attention to the property in |
| tenancies and comparable properties are not | | | | all respects and make sure you inspect any |
| always as you expect. The location of the other | | | | comparable rentals before accepting them. |
| tenancy relevant to the facilities, services, and | | | | |