The value of options in real estate leases. (Asset Management): An article from: Journal of Property Management

This digital document is an article from Journal of Property Management, published by Institute of Real Estate Management on May 1, 1994. The length of the article is 4002 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: An option is a contract that provides the holder with the authority to purchase or sell a given asset. Tenants and landlords recognize the value of options in real estate leases even though their focus may appear to be on the rental rate. Among the options often included in leases are those to buy, sell, expand, renew, cancel and contract. Other lease terms that have option value are sublet profit-sharing, limited liability, most-favored-tenant status, percentage rate, and limits on tax and operating expenses. A 'call' option in real estate leases gives the holder the right to acquire space either by buying or renting it. Options to expand, renew and sublet space are considered call options. A 'put' option, on the other hand, provides the holder the right to sell. Options to cancel the lease and to receive the most-favored-tenant status are examples of put options.

Citation Details
Title: The value of options in real estate leases. (Asset Management)
Author: Kenneth A. Posner
Publication:Journal of Property Management (Refereed)
Date: May 1, 1994
Publisher: Institute of Real Estate Management
Volume: v59 Issue: n3 Page: p60(5)

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