FREE CRECI Commercial Lease Analysis Questions and Answers

Question 1

A tenant signs a 5-year lease for 3,000 square feet of office space at a rate of $40 per square foot annually.
The landlord provides four months of free rent and a tenant improvement (TI) allowance of $30,000.
What is the net effective rent per square foot for the entire lease term?

Accepted Answer

$32.00

Answer

$40.00

Answer

$34.67

Answer

$37.33

Question 2

A tenant leases an office suite measuring 5,000 usable square feet (USF). The building has a load factor of 18%, which accounts for the tenant's pro-rata share of common areas. If the annual rental rate is $35 per rentable square foot (RSF), what is the tenant's total annual rent?

Accepted Answer

$206,500

Answer

$175,000

Answer

$180,000

Answer

$200,000

Question 3

During the due diligence for a property acquisition, the buyer's lender requests a signed document from each tenant that confirms the lease term, current rent amount, and whether any defaults exist. What is this document called?

Accepted Answer

An Estoppel Certificate

Answer

A Subordination, Non-Disturbance, and Attornment (SNDA) Agreement

Answer

A Lease Abstract

Answer

A Letter of Intent (LOI)

Question 4

A lease for a space in a multi-tenant office building contains a provision that allows the landlord to calculate a tenant's share of variable operating expenses based on the costs that would be incurred if the building were 95% occupied, even if actual occupancy is lower. What is this provision known as?

Accepted Answer

A Gross-Up Clause

Answer

An Expense Stop Clause

Answer

A Pass-Through Clause

Answer

An Escalation Clause

Question 5

A small retailer's lease in a shopping center includes a clause that allows them to pay a lower rent or terminate the lease if the primary anchor tenant, a major grocery store, ceases its operations. This type of provision is best described as a:

Accepted Answer

Co-tenancy Clause

Answer

Exclusive Use Clause

Answer

Sublease Clause

Answer

Holdover Clause

Question 6

A retail lease requires the tenant to pay percentage rent of 5% on all gross sales exceeding a 'natural breakpoint'. If the tenant's annual base rent is $120,000, at what level of annual sales will they begin to pay percentage rent?

Accepted Answer

$2,400,000

Answer

$1,200,000

Answer

$6,000,000

Answer

$1,800,000

A tenant signs a 5-year lease for 3,000 square feet of office space at a rate of $40 per square foot annually.The landlord provides four months of free rent and a tenant improvement (TI) allowance of $30,000.What is the net effective rent per square foot for the entire lease term?

A tenant signs a 5-year lease for 3,000 square feet of office space at a rate of $40 per square foot annually.
The landlord provides four months of free rent and a tenant improvement (TI) allowance of $30,000.
What is the net effective rent per square foot for the entire lease term?