Analysis of
Responses to
Proposals
After the
owner has responded
to your initial
proposal, it
is time to analyze
all the major
points of the
response. If
you have made
more than one
proposal there
are certain
elements that
need to be compared.
These items
might include:
Rent rate calculated
on the basis
of rentable
square feet
and the rental
rate calculated
on the basis
of useable square
feet. This is
arrived at by
subtracting
the load factor
from the rentable
square footage.
Compare the
effective rent,
which is nothing
more than averaging
all the years
of the rent
and factoring
in any free
rent periods.
This is important
because your
responses may
use different
rent structures.
By reducing
this to the
average rent
per year, per
foot, you can
easily see which
proposal has
the better economics.
Different properties
have differing
operating expense
histories and
it is a good
idea to ask
for a 3-year
history of the
operating expenses.
Well run buildings
have very stable
operating expense
histories and
unless there's
been a spike
in energy costs,
janitorial contract
re-negotiations,
an insurance
crisis, or snow
removal, the
expenses should
be fairly even.
Next you
will want to
compare:
-
Tenant
improvements
offered
by the
owner
-
The
cost
of any
improvements
you
are
required
to provide
-
Length
of term,
options
to expand,
extend
or to
cancel
-
Timing
to delivery
-
Overall
suitability
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