Retail landlords and tenants often make side deals designed to alter the market value of a property. One example would be Carlyle Group’s deal with Crate and Barrel in which Crate amen barrel agreed to let a future landlord raise its rent in the middle of a six year lease in exchange for cash from a sale, which raised the sale price of the whole building. These kinds of deals are common, and usually legal as long as they’re transparent, but critics note that inflating the value of retail real estate distort the market and prices out many would be buyers. However, the side deals will likely continue, especially because many investors overpaidnformtheirncurrent properties.
- Lawmakers such as Sen. Brian Benjamin are trying to push for more transparency when it comes to the retail realty market.
- Some landlords will put out figures as low as $250 per month which prospective renters can identify as fraudulent immediately.
- Be aware of the inflation tactic used by landlords who offer to pay your rent in exchange for a higher rent paid at their own property.
“While the so-called lease amendment that the two parties signed was just an option for a future buyer, it allowed Carlyle to tout a higher rental income, increasing the value the building could fetch on the open market.”