Overage rent

[CANative]

As you noted, since this is for a property tax appeal the overage rent is not relevant. You are evaluating fee simple, not leased fee for property tax purposes. Therefore, current market rent would be applied in your analysis. Most retail properties with an overage rent provision also incorporate a natural break and therefore the market rent would generally represent the amount of the natural break.

I feel the need to sound "scholarly" when I stand up at a formal hearing before the full board of the most populous County in the US. I want to talk about intangible assets and BEV (more importantly lack of BEV) in malls and shopping centers.

 

[Howard Klahr]

The issue of BEV as it relates to malls and shopping centers is based on ownership and management) branding not overage rent.

 

[CANative]

Is contract rent above market rent real estate or an intangible?

 

[PropertyEconomics]

Overage rent that is declining would typically be discounted, at a decreasing amount, over the remaining term of the lease and added to the capitalized value of the market rental amount. Decreasing overage rent would suggest a decline which could be attributable to location, tenancy, or both.

 

[Howard Klahr]

real estate