Topic
Net lease
About: Net lease is a research topic. Over the lifetime, 8 publications have been published within this topic receiving 62 citations.
Papers
Patent•
24 Jun 2005
TL;DR: In this article, the ratings of the debt securities of the securitization rely on the aggregate pooled credit quality of the multiple financial institutions backing the various net lease assets and the geographic diversity of such financial institutions, instead of on the explicit investment ratings of any one of the individual obligors in the pool.
Abstract: A financial securitization transaction, such as a collateralized debt obligation (CDO) transaction, that (i) is at least partially collateralized by a plurality of net lease assets where the tenants to the leases are financial institutions generally with assets of less than $10 billion, and (ii) where such securitization may not be fully collateralized by such net lease assets, in which case the remainder of the collateral for such securitization may consist predominantly of obligations (including trust preferred securities, debt and/or surplus notes) of financial institutions, and/or traunches of CDOs backed predominantly by such obligations. By restricting the assets to net lease assets in which the tenants are financial institutions and restricting the remaining assets to predominately obligations of financial institutions or tranches of CDOs backed by such obligations, more favorable ratings are obtainable from the ratings agencies for the securities backed by the net lease assets. In accordance with an important aspect of the present invention, the ratings of the debt securities of the securitization rely on the aggregate pooled credit quality of the multiple financial institutions backing the various net lease assets and the geographic diversity of such financial institutions, instead of on the explicit investment ratings of any one of the individual obligors in the pool. In accordance with another important aspect of the present invention, as opposed to the typical 5%-10% recovery rate assumed for traditional financial institution collateral used in pooled financial institution obligation CDO transactions, the net lease assets are collateralized by property, which translates into a materially higher assumed recovery rate, for example, in excess of 40%. Through the mechanism of the balloon payment provider (which is also an important aspect of the present invention), the net lease assets do not require residual value insurance and the need for equity capital is significantly reduced or even eliminated.
14 citations
TL;DR: In this paper, the impact of key financial variables on the dependent variable medical office construction spending put in place in the USA was examined using a case study using a cost-benefit model.
Abstract: Purpose – The purpose of this paper is to exam the financial impact on the owner/lessor who is considering a partial energy upgrade to an existing medical office building. The owner who leases the building using a triple net lease does the upgrade prior to leasing the building, with the expectation of earning higher rents. How much should the owner who leases the property spend for a given rent per square foot increase? Design/methodology/approach – The empirical study highlights the impact of key financial variables on the dependent variable medical office construction spending put in place in the USA. The independent variables prime interest rate, cost of natural gas per therm and electricity cost per KWH, resale building prices are significant variables when predicting medical office construction spending. A case study using a cost-benefit model is developed. It inputs corporate income tax rates, incorporates a debt service coverage ratio, prime interest rate, analyzes investment tax credit (ITC) and r...
11 citations
Journal Article•
TL;DR: A green lease allocates the risks and premiums associated with a green building when there are different incentives from the usual ones that arise from a typical triple net lease where, by way of example, the owner pays for the capital improvements to reduce energy use, but the tenant who pays the utility bills reaps a Green building's benefit of energy savings as discussed by the authors.
Abstract: A Green lease is not the same old lease for a nonresidential building simply printed on recycled paper, but rather it is a new form of lease for buildings that are more resource-efficient and environmentally responsible, have lower operating costs and increased asset values, and enhance occupant comfort and health. A Green lease allocates the risks and premiums associated with Green building when there are different incentives from the usual ones that arise from a typical triple net lease where, by way of example, the owner pays for the capital improvements to reduce energy use, but the tenant who pays the utility bills reaps a Green building’s benefit of energy savings.
8 citations
TL;DR: In this paper, the authors investigate whether energy-efficient green buildings tend to provide net lease structures over gross lease ones, and consider whether owners benefit by trading away operational savings in a net lease structure.
Abstract: The purpose of this paper is to investigate whether energy-efficient green buildings tend to provide net lease structures over gross lease ones. It then considers whether owners benefit by trading away operational savings in a net lease structure.,Empirical models of office leasing transactions in Sydney, Australia, with wider transferability supported by analysis of office rent data in the USA.,Labeled green buildings are approximately four to five times more likely than non-labeled buildings to use a net lease structure. However, despite receiving operational savings, tenants in net leases pay higher total occupancy costs (TOC), benefiting owners. On average, the increase in TOC paid by tenants in a net lease is equal to or greater than savings attributed to an eco-labeled building.,A full accounting of TOC in eco-labeled buildings suggests that net lease structures provide numerous benefits to owners that offset the loss of trading away operational savings.,The principal-agent market inefficiency, or “split incentive,” is a widely cited barrier to private investment in energy-efficient building technology. Here, a uniquely broad look at rental cash flows suggests its role as a barrier is exaggerated.
5 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2019 | 1 |
| 2016 | 3 |
| 2013 | 1 |
| 2009 | 1 |
| 2005 | 1 |
| 2002 | 1 |