Since 2009, PPA has conducted REDD for the acquisition of several multi-site target and add-on companies with retail locations.
Key risks in the Retail Sector include….
Above Market Real Estate Taxes – In retail it is always prudent to conduct a real estate tax analysis due to the oftentimes disparity in tax bills per square foot.
Change-in-Control – A particular hot button because of the financial risk and the fact that no one likes to be “held hostage.” PPA identifies change-in-control risks and works with the Landlord to mitigate this risk. Our efforts yield better results, of course, when there is not an imminent consent request.
Entitlement Exposure – Access/Egress/Parking; Title/Survey; Permitted Use – PPA reviews the entitlements to ensure that they serve the needs to the Tenant (target). Problems with entitlement exposure include Benihana, Bar Louie, Smart Choice, Empower PT.
Leave Provisions – Endemic to the Retail Sector are lease provisions such as “Go Dark,” “Competitions Restriction” and “Percentage Rent” which should be carefully reviewed to fully understand the Tenant’s restrictions, rights and obligations.