Lease Renewal & Ground Lease Valuation Services
Who We Are
Independent Valuation Services for Lease Re-Valuations
In many lease agreements, there are provisions that require an appraisal of a certain property interest or an appraisal based on a certain use. Such provisions are commonly found in long-term agreements, including ground leases. In lease renewal negotiations or disputes involving rent resets, an objective, market-supported valuation can play a pivotal role in the lease process.
Schneider Valuation Consultants, Inc. provides appraisal and consulting services tailored to these complex scenarios, where property rights, highest and best use, lease clauses, and other factors must be appropriately analyzed.
SVC’s approach is simple: to provide a valuation analysis that is specific to the property and contract, considering relevant market evidence and delivering the results in a manner that can be understood by the parties involved.
Focus Area
Assignments involving differing property interests (fee simple, leased fee, leasehold) types of leases (ground leases, space leases) and uses (current use, highest and best use) are a core focus of Schneider Valuation Consultants, Inc. Services are commonly used in rent reset matters, negotiations, and litigation where rent or land value is contested.
Ground Lease Issues
Valuation issues often arise when leases include provisions for periodic rent resets based on land value or market rent. Disputes may also involve renewal rates based on a particular use, or reappraisal clauses that involve a percentage of land value. WIth experience in ground lease matters, these issues are carefully analyzed to ensure that the opinion of rent is supported by market-derived data and use appropriate valuation methodology, with attention to the lease terms, use restrictions, or other issues that affect rent.
Land Valuation Services
In many situations, the rent to be paid by a lessee to a lessor in a ground lease reset involves an opinion of land value. Depending on the language of the lease, land value may be based on a certain use, which requires an analysis of relevant terms.
Who We Work With
Valuation support is provided to real estate counsel, property owners, tenants, and other experts engaged in lease renegotiation or renewal proceedings.
Attorneys and Legal Advisors
SVC regularly provides litigation support for valuation matters, including for lease renewals and lease negotiations. Assistance includes an appraisal analysis of relevant lease clauses, with value conclusions presented in a matter that is supported by market evidence and presented in a matter to fit the needs of counsel.
Property Owners
The type of property owner can vary, including family partnerships, institutional investment groups, land trusts, and public entities. No matter than ownership, an objective assessment of relevant rent or land value issues is critical, particularly for long-term ground lease situations where rent may be established for a long period of time.
Tenants
For tenants subject to rent increases, valuation consulting helps clarify rent obligation impacts resulting for revaluation clauses or other relevant rental issues.
Other Experts
When retained to provide neutral input or respond to an opposing report, a structured, independent valuation is paramount to determine the impacts of a rent renewal.
Valuation Considerations
Each lease is influenced by a variety of issues, including lease terms, revaluation clauses, and use of the property.
Market Rent Analysis
Rent can be determined by several methods, including an evaluation of comparable lease data and a rate of return on property value. There may be differing definitions of rent (e.g., market rent, fair market rent, or some other type of rent) that must be considered.
Land Value Estimation
For ground leases or rent-reset clauses tied to land value, an understanding of relevant market data, appropriate valuation methodology, and subject property characteristics is necessary.
Rights and Restrictions
Lease terms such as revaluation clauses, use restrictions, or valuation processes are analyzed for their influence on the value of the relevant interest being appraised.
Litigation Support
Oftentimes, valuation opinions related to rent resets are needed for differing uses such as arbitration, mediation, and/or trial. An experienced valuation expert is necessary to ensure that the property methodology is followed and can be easily explained.
Each lease renewal or ground lease assignment is approached with careful attention to both the contractual language and market data. The objective is to clarify value-related issues so that parties can navigate complex lease negotiations or disputes with reliable, impartial information.
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or call us at 858.208.3175.
