If the NNN lease is already in existence the future rent should already be determined? If the lease term ends soon, it may be the market rents are higher today. In that case proforma may be useful? That said, in today's economy even a lease that is already in existence may get renegotiated in the future. Many tenants are suffering from the slow economy and leases negotiated at high lease rates are simply not sustainable. If the lease started a few years ago it is very likely today's lease rate will be a lot lower. Tenants are going to landlord's and negotiating lower rents. The alternative for many landlord's is not good in that the tenant may file bankruptcy if the rent is not lowered. By lowering the rent the value of the asset goes down as well. Many property owner's equity has evaporated, some below the loan amounts on the property. As mentioned in other answers, beware of proforma rents. Have a look at what the property would rent for if the existing tenant was gone (lenders do that now in determining loan amounts) and use that as your proforma.
Oct 22, 2009