Ten Rent-Free Months!
The New York Observer wrote about what on the face of it sounds like an amazing generous deal : 10 months of rent free occupancy!
I before wrote about the marketing power of “free rent,” i.e. offering a tenant rent-free occupancy at the beginning o a new lease term.
Ten rent free months on a 120 month lease on a simple basis equates to less than a 10 percent discount. On a present value basis it’s modestly more generous, because a dollar today of course is worth more than a dollar tomorrow (this is the “time value of money”).
To me, and to most tenants in my opinion, 10 months of rent free occupancy makes a much bigger impact than say a reduction in base rent from $99 per square foot to $90 per square foot.
Use rent-free occupancy to keep your existing tenants and lure new ones to your buildings.
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Tags: rent free occupancy
