What does dark mean in commercial real estate?
The tenant’s right to cease operations at its leased space while the tenant continues to pay rent. A go dark clause is commonly negotiated in retail leases. The right to go dark provides tenants with maximum flexibility, which is especially important for large national retail tenants.
What is dark property?
Dark Property means a Borrowing Base Property where one or more of the tenants previously occupying the Borrowing Base Property has vacated the Borrowing Base Property, but the Borrowing Base Property remains 100% leased (without regard to any subleases) to a tenant maintaining a rating of BBB-/Baa3 or better, which …
What does it mean when a tenant goes dark?
A provision highly sought after by tenants, the typical “go dark” provision allows a tenant to completely cease operations at the premises without being in default of its lease; provided that the tenant is not then currently in default, continues to pay rent to the landlord and meets its other obligations under the …
What is go dark value?
There is not an authoritative definition of “go dark” value. Simply put, it is the market value of a property assuming lease termination of the primary tenant. … The estimation of such a value requires the forecast of time and expense necessary to re-lease the property, including reconfiguration costs.
What is a co tenancy clause in a commercial lease?
A co-tenancy clause in retail lease contracts allows tenants to reduce their rent if key tenants or a certain number of tenants leave the retail space. … A co-tenancy clause provides the tenant with some form of protection in the form of reduced rent to compensate for the loss of traffic.
What is a go dark Covenant?
• Go-Dark Provisions. Many leases contain a “go-dark” provision that permits a tenant to. discontinue its business operations for such time as the tenant continues to pay rent under the. lease, but different parties to a real estate transaction will have different concerns to address.
What is a continuous operation clause?
A continuous operations clause in a lease is a requirement that obligates the tenant to continuously operate its business throughout the term of the lease. … The basic concept is that if a store closes, the shopping center loses the customers attracted by the store and other tenants lose business.
What is the meaning of appraised value?
An appraised value is an evaluation of a property’s value based on a given point in time. The evaluation is performed by a professional appraiser during the mortgage origination process. … Appraised value may not correspond to an asset’s or property’s market value.
What does highest and best use mean in real estate?
Highest and Best Use, Defined
The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible and that results in the highest value.
Is value in use market value?
Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use. In the U.S., it is generally estimated at a use which is less than highest-and-best use, and therefore it is generally lower than market value.