Real Estate Division

CPD 109 - Lease Analysis

Pre-requisite: Recommend BUSI 330, BUSI 111/112, and BUSI 121

This course is intended to explore the principles and techniques of commercial and residential lease analysis. It assumes no particular background for the reader, other than an interest in commercial real estate and a desire to learn. After reading the course materials, the reader will have a good basic knowledge of lease analysis theory and its practices. Lesson 1 explains the types of tenure, lease clauses, lease definitions, and provides an overview of commercial tenancy law. Lesson 2 expands on the mathematics of lease analysis as well as reviewing several standard leases.

Course Outline

Foreword: Introduction to Professional Development Courses

Lesson 1: Introduction to Leasing

  • Introduction to Leasing
  • The Rights and Obligations of the Parties
  • Remedies For Breach
  • Termination of Tenancy
  • Registration and Priority of Leases
  • Comparing Residential and Commercial Tenancies
  • Essential Elements of a Lease
  • Gross and Net Leases
    Lease Documents
  • Terminology
  • List of Typical Clauses Found in Standard Leases
  • Summary of Major Terms and Conditions
  • Types of Property Commonly Leased
  • Special Use Leases
  • Advantages to Lessor and Lessee of Lease
  • Review and Discussion Questions

Lesson 2: Lease Analysis

  • Introduction to Lease Analysis
  • Sample Leases (Appendices A and B)
  • Identification of Various Interests in a Leased Property
  • Identification of Interests
  • What Creates Leasehold Value
  • Valuation Methods
  • Selection of Discount Rates for Various Interests
  • Illustrations of Market and Contract Rents
  • Long Term Graduated Leases
  • Complicated Lease Problem
  • Percentage Leases
  • Appendix A: Sample Shopping Centre Lease
  • Appendix B: Sample Lease For Office Premise In Traditional Office Building
  • Appendix C: Example Of A Gross Lease With The Operating Cost Adjustment Clause
  • Review and Discussion Questions

Afterword

  • The Final Examination

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