There is an appraisal that requires continuous rent. Requests for this appraisal and investigation have increased a lot recently (I feel like it). Continuous rent is not a case where real estate is leased anew, but how to revise the current rent when continuing the lease, but since the borrower wants to rent cheaply, the lender wants to lend as high as possible, and it is also in a relationship that continues over a long period of time, it is difficult for both parties to lose, and there is a request from a real estate appraiser as an opinion of a third party.
There are various purposes, such as when the relationship between borrowers and lenders deteriorates and is necessary for mediation or trial, and conversely, in leases between related companies, it is necessary to lend and borrow at a compliance market level.
After all, in the case of a new lease, there is a reasonable market, but in the case of continuation, the circumstances when the original conditions were agreed upon are also involved, so it is impossible to use the market level as it is. In terms of appraisal theory, rent is sought in consideration of changes in economic conditions from the time the contract was agreed upon to the present, but real estate appraisers worry their minds while making full use of various methods in search of where the contract was agreed.
According to news from the Japan Association of Real Estate Appraisers, most of the top 10 training menus offered by the Association were occupied by rent, especially continuous rent training. I wonder how real estate appraisers from all over the country are twisting their heads over this continuous rent even in this news. As a matter of fact, inquiries about continuous rent and land rent account for more than half of every consultation with our company.
My current job was previously engaged in a business (asset management) that stood on the fund side, and rent negotiations with tenants were a daily routine there. When the coronavirus spread rapidly, requests for rent reductions and temporary restitution were received from most renters, but there were times when investors were holding back in the fund, so they had the dilemma of not being able to easily respond. At that time, there was no room to make a decision by listening to the opinions of a third party amidst arrow reminders, but when I thought about it calmly, I came to the idea that obtaining a real estate appraisal was one way to gain understanding between the tenant who is the borrower and the fund that is the lender.
Although COVID-19 is coming to an end, it has changed our lives. I presume that building owners with various tenants are worried about negotiating terms on a daily basis. I wonder if listening to the opinions of a third party in order to find a place to calm down (or appease the tenant) is one idea.
Reprinted from “Weekly Building Management” by Building Management Institute Co., Ltd. (with permission)
