Buying A Property W/ Existing Leases
I am working a deal which is a office building w/ some existing lease. 2 of lease are at about 30% of market.
The landlord is a principal/affiliate in both these tenants so there was a conflict of interest when the leases originated.
Now that I may be stuck w/ these lease is there any things I can do to void, or renegotiate the sweet heart leases and get them closer to market rent?
The leases will run with the title, not the current owner. Unless the lease terms are violated, any new buyer will be stuck with them. Generally the only response you would have to a pre existing "sweetheart" lease would be to lower your purchase price sufficiently to make up for the loss in income. After all, the value of a commercial property is determined by the income it generates...
Chris