Percentage Leases and the Advantages of Regional Malls
The differences in the ownership structures of downtown retail districts and shopping centers may give rise to varying space allocations and rental contracts found in these markets. This article specifically examines the value-enhancing aspects of percentage leases and explores the mechanisms of tenant mix, risk sharing and rent discrimination through which this value is created. The use of percentage leases may lead to superior returns by allowing a rent structure that approaches perfect price discrimination. Risk sharing through the use of percentage leases may also create value for the property owner and lead to lower rents for tenants.
Volume (Year): 15 (1998)
Issue (Month): 3 ()
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References listed on IDEAS
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- Brueckner, Jan K, 1993. "Inter-store Externalities and Space Allocation in Shopping Centers," The Journal of Real Estate Finance and Economics, Springer, vol. 7(1), pages 5-16, July.
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- Kerry D. Vandell & Charles C. Carter, 1992. "Retail Store Location and Market Analysis: A Review of the Research," Wisconsin-Madison CULER working papers 92-02, University of Wisconsin Center for Urban Land Economic Research.
- John D. Benjamin & Glenn W. Boyle & C. F. Sirmans, 1990. "Retail Leasing: The Determinants of Shopping Center Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 18(3), pages 302-312.
- Dean H. Gatzlaff & G. Stacy Sirmans & Barry A. Diskin, 1994. "The Effect of Anchor Tenant Loss on Shopping Center Rents," Journal of Real Estate Research, American Real Estate Society, vol. 9(1), pages 99-110.