InvestorsHub Logo

See Shasta

01/25/06 12:00 PM

#11501 RE: skono4 #11490

Re NDN, I would think that a reasonable landlord wouldn't raise the rents as high as you might think in most situations. These stores are often in older shopping centers and take enough space that avoiding a vacancy is important to the landlord. Of course all bets are off is the landlord is updating the center. Where the high real estate values come into play are in the capitalization rates paid on the income stream.

There are rules of thumb about what percentage of a retail stores gross should go to rent. If a store is performing better they can afford to pay more - that is why percentage rent is popular in some markets. Also, some discount stores have negotiated rents that are a percentage of gross sales. Not sure if that helps. Like Joe Stocks already mentioned, the terms are quite variable.