Real Estate Jukebox: Money Changes Everything: Buybacks for Concessions Granted to Tenants

THE ISSUE: A key measure of the value of a building is the building's ability to generate net operating income ("NOI"). Depending on the cap rate then prevailing in the market, buyers pay between ten and twenty dollars in price for each dollar of NOI. Financial concessions, such as protections against tax increases due to reassessment or caps on operating expenses, decrease NOI and, ultimately, the value of the asset -- sometimes significantly.

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Allen Matkins Leck Gamble Mallory & Natsis LLP on:

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