|Cupcake Reimbursement and Other Interesting Lease Provisions
Situs has completed over 60,000 lease reviews since 2005 and each lease has individual provisions. These provisions can range from the standard to the unique.Have you ever heard of a cupcake reimbursement clause? Or an alligator replacement clause? The below are some true examples that Situs found in leases abstracted over the years:
- Cupcake: “Notwithstanding anything to the contrary contained elsewhere in this Lease, Landlord agrees to reimburse Tenant for the purchase of up to two (2} cupcakes per day from ABC Bakery. Landlord will reimburse Tenant for such purchases within thirty (30} days of its receipt of evidence of purchase.”
- Baseball: “When the last remaining player from a specific college baseball team from a certain year passes away, Tenant can terminate the lease.”
- Alligator: “For 2018, a space in the vicinity of ABC store will be provided at no charge. However, Tenant is to provide their own tent, etc. and abide by all of the rules and regulations of the festival. Tenant is to provide alligator in 2018 as Tenant did in 2017 at no charge.”
Burrowing through numerous pages of complex lease documents and deciphering legal terms is arduous and time consuming. To receive quick and accurate lease abstracts, all parties in the CRE cycle should find an abstracting partner that uses CRE subject-matter specialists with legal expertise, has vast abstracting knowledge and strong data management and integration skills.
Click here to learn more about Situs’ lease abstracting capabilities.
No One at the Wheel: What Will Driverless Cars Do to Real Estate?
To say that the introduction of driverless vehicles will have both macro and micro effects is a macro understatement.
Automation has and will continue to change the way Americans travel, commute and consume, distribute and own things — everyone from economists to Facebook’s Mark Zuckerberg agrees. And driverless cars are on their way. With Intel’s August acquisition of sensor and navigation software firm Mobileye, another major company formally entered the cutthroat race to develop mass-market driverless cars. Both Ford and GM have already acquired software and artificial intelligence companies; Tesla offers an “autopilot” feature, and Elon Musk contends his Tesla cars ship with adequate hardware to go driverless already. The U.S. House of Representatives, in early September, approved legislation that paves the way for driverless cars to, well, get on the road. Comparable legislation has been introduced in the Senate.
What will the inevitable shift toward cars that drive (and park) themselves do to the real estate market? That’s one thing no one agrees on, yet.
“I think the future rarely plays out the way people anticipate that it will,” said Seth Pinsky, an executive vice president at RXR Realty and former president of the New York City Economic Development Corp. “I think it’s very difficult in the real world to know that what you’re doing will avoid obsolescence many years down the line.”
It’s perhaps a fool’s errand to attempt to anticipate what something as profound as self-driving cars might do to any industry, but Commercial Observer learned that many of the largest real estate companies feel that — at this point — they have no recourse but to try.
read more: Commercial Observer
Warehouse Conversions Aren’t Just for Cities Anymore. Or Just for Warehouses.
The notion that old commercial buildings could enjoy a second life as places to live and work was popularized by artists in Manhattan’s SoHo neighborhood in the 1960s, when dusty warehouses started to give way to studios and apartments.
And in the ensuing years, the trend seemed to play out mostly in dense urban areas, where tight quarters necessitated that residents be creative.
Now, however, in an era when homes and offices seem to embrace industrial décor, such “adaptive-reuse” projects are turning up in more suburban areas, in a slew of building types, like power plants, churches, schools, prisons, railroad stations, hospitals and factories.
Despite their growing popularity, the conversions can be complex, time-consuming and expensive, scaring off some developers. And projects can also risk a backlash: Plans for luxury housing in buildings that once employed entire neighborhoods may not sit well with every community.
But as the market for conversions expands, developers are becoming inventive, as with two current New York-area projects.
read more: NYT
Why Big Data Companies Are Building Server Farms in Middle America
When Apple Inc. picked a Des Moines, Iowa, suburb for its next high-end data center over the summer, only its sixth in the U.S., it wasn’t playing its typical tech-industry-pioneer role. It was following Google, Microsoft and Facebook, all of which have already planted data-center flags in the Hawkeye State.
It’s somewhat surprising, but rapidly getting less so, to see technology giants of the Silicon Valley or Seattle turning from industry power hubs on the coasts to second-tier markets to establish new data centers. States like Iowa, Ohio, Nevada and North Carolina have steadily built their infrastructure and business cases, and industry watchers say they have gained momentum amid surging demand for digital storage space and shifting corporate data management trends that might just blow the barn doors off.
Many factors contribute to the wider geographic play, but big data center operators such as Amazon, IBM, Google and SalesForce are hungry for core ingredients of land, power and water, which can be plentiful and cheaper off the coasts, according to Sean Brady, a managing director and co-founder of the global data center advisory group at Cushman & Wakefield.
“They’re going to go for a campus,” Brady said. “They’re typically going to buy a tract of land and build it.”
The main players are tech or software companies adding capacity for their own storage needs, such as Apple and Facebook; cloud computing giants and co-location providers running data for others, like IBM’s SoftLayer and Microsoft’s Azure; and some — Amazon, for one — operating in multiple camps. While today’s push has a cloud-computing flavor, the whole market is hot, Brady said.
read more: Commercial Observer
How Some Malls Manage to Stay Alive Years After Losing Their Mojo
The U.S. has far too many malls scrambling to attract consumers at a time when online shopping is tightening its grip.
That doesn’t mean middling malls will die quickly, however.
Projections for hundreds of shopping centers to close in the next five years could prove too pessimistic. A more likely outcome, analysts said: many weaker malls will turn into zombies, staying open for years as they cycle through increasingly less successful retailers before finally being repurposed or leveled.
“It takes a very long time to transition these malls,” said Thomas Dobrowski, executive managing director of capital markets at real estate services firm Newmark Knight Frank. “They don’t die of heart attacks.”
Part of the reason for weak malls’ persistence lies in contracts signed years or decades ago. Landlords typically strike leases of 10 or 20 years with multiple tenants, making speedy exits difficult. In some cases, lease buyouts can be negotiated, but the process can be expensive and lengthy.
read more: WSJ
Robots Are Coming for These Wall Street Jobs
Traders, prepare to adapt.
Wall Street is entering a new era. The fraternity of bond jockeys, derivatives mavens and stock pickers who’ve long personified the industry are giving way to algorithms, and soon, artificial intelligence.
Banks and investment funds have been tinkering for years, prompting anxiety for employees. Now, firms are rolling out machine-learning software to suggest bets, set prices and craft hedges. The tools will relieve staff of routine tasks and offer an edge to those who stay. But one day, machines may not need much help. It’s no wonder most of the jobs Goldman Sachs Group Inc.’s securities business posted online in recent months were for tech talent. Billionaire trader Steven Cohen is experimenting with automating his top money managers. Venture capitalist Marc Andreessen has said 100,000 financial workers aren’t needed to keep money flowing.
read more: Bloomberg
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