The Anatomy of a Lease

  • G. Jason Goddard
  • Bill Marcum
Part of the Springer Texts in Business and Economics book series (STBE)


The review of commercial leases is a key component of an investor’s (or a lender’s) due diligence prior to purchase (or financing) of an investment real estate property. The length of the lease income, in conjunction with the amount of competing, available space in the market, represents the durability of the income stream in our aforementioned QQD framework. The lease is a contractual obligation between the lessor (owner) and the lessee (tenant). The lease documents how much rent will be paid, for how long it should be paid, and how expenses may be shared. In this section, we will discuss how the price of rent is determined, how rent is calculated, and how expenses can be shared between the lessor and the lessee.


Cash Flow Operating Expense Property Investor Lease Rate Lease Term 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • G. Jason Goddard
    • 1
  • Bill Marcum
    • 2
  1. 1.Investor Real EstateWells FargoWinston-SalemUSA
  2. 2.Wake Forest UniversityWinston-SalemUSA

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