Articles with keyword "Contracts"

Determination of Fair Market Rent (Part 1 of 2)

In the current commercial leasing market, rent rates for new leases are far below rates from a few years ago. As a result, if the parties negotiate a renewal option as a term in a new lease, landlords are generally unwilling to commit to a continuation of the “low” rent rate for the renewal term (or a 2%-5% per year increase based on the initial term’s low rent rate). Regardless of your opinion on when the commercial leasing market will fully recover, most would agree that the market will look different in five years than it does today. Accordingly, parties commonly agree that the rent rate for a renewal term will be based on a determination of fair market rent at the time of renewal. read more