How do I calculate a Blend and Extend rate?

any additional steps to consider when the market rate is higher than what the tenant is currently paying?
In Leasing Property - Asked by Jeffrey P. - Sep 27, 2013
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Harry G.
Georgetown, TX

I would probably structure the lease so as to maximize the NOI should the Owner be inclined to sell. Is the tenant willing to stay and extend the lease term with the higher rates blended in. I have found it to be generally good practice to keep a good tenant in place even if slightly below market for the following reasons. First, no additional finish out unless that is part of the deal to extend. Second, no vacancy no down time. Third, the owner probably saves some on brokerage fees, One last thought, I would make sure the tenant is financially capable of paying any increased rents especially if the market rates are substantially higher than the contract rates. Good luck, Harry Gibbs, CCIM

Sep 28, 2013
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