lease-comparison-expert

Lease Comparison = Systematic analysis of multiple lease documents to identify differences in terms, structure, and economics.

Use Cases:

1. Amendment vs. Original: Track changes over time
2. Competing Offers: Evaluate multiple tenant proposals
3. Precedent Deviation: Ensure consistency with standard form
4. Portfolio Benchmarking: Compare similar leases across properties
5. Market Analysis: Benchmark against comparable deals

Types of Comparisons

1. Amendment vs. Original Lease

• Identifies what changed
• Tracks evolution of deal terms
• Detects inconsistencies
• Documents negotiation history

2. Offer A vs. Offer B (Competing Offers)

• Compares economic terms (NER, NPV)
• Evaluates non-economic factors (term, flexibility)
• Recommends best offer
• Identifies negotiation leverage

3. Draft vs. Precedent (Standard Form)

• Highlights deviations from landlord's standard
• Flags unusual provisions
• Assesses risk of tenant-favorable changes
• Maintains consistency across portfolio

4. Lease vs. Market Comparables

• Benchmarks rent against market
• Compares concession packages
• Evaluates competitiveness
• Supports rent negotiations

Comparison Framework

Key Dimensions:

1. Economic: Rent, escalations, concessions, costs
2. Term: Duration, renewal options, termination rights
3. Flexibility: Assignment, subletting, expansion, contraction
4. Risk Allocation: Insurance, indemnity, environmental
5. Operational: Use, hours, parking, services
6. Legal: Default, remedies, dispute resolution

Step 1: Define Comparison Scope

Questions:

• What are you comparing? (2 offers, amendment vs. original, etc.)
• What dimensions matter? (economic only, or full lease review?)
• What's the decision being made? (accept/reject, negotiate, standardize?)

Step 2: Extract Key Terms

Create comparison matrix:

```

Provision | Document A | Document B | Difference | Impact

-----------------+------------+------------+------------+---------

Base Rent | $20/sf | $22/sf | +$2/sf | $40K/year higher

Free Rent | 3 months | 6 months | +3 months | $55K concession

TI Allowance | $10/sf | $15/sf | +$5/sf | $100K higher

Term | 5 years | 3 years | -2 years | Shorter commitment

Renewal Option | 1 × 5 yrs | None | No option | Less flexibility

```

Step 3: Calculate Economic Impact

For competing offers:

1. Calculate NER for each offer
2. Calculate NPV for each offer
3. Assess risk-adjusted return (shorter term = higher risk)
4. Rank offers by economic value

Step 4: Assess Non-Economic Factors

Consider:

• Tenant quality: Credit strength, business stability
• Operational fit: Use compatibility, hours, parking needs
• Strategic value: Anchor tenant, synergies with other tenants
• Flexibility: Options, assignment rights, expansion potential

Step 5: Recommend Decision

Framework:

• Best Economic Value: Highest NPV/NER
• Best Risk-Adjusted Value: Balances return and tenant quality
• Best Strategic Fit: Aligns with long-term property plan

Output: Clear recommendation with supporting rationale

Net Effective Rent (NER) Comparison

Purpose: Normalize different rent structures to comparable metric

Example:

```

Offer A: $20/sf, 3 months free, $10/sf TI, 5 years

→ NER = $18.50/sf

Offer B: $22/sf, 6 months free, $15/sf TI, 3 years

→ NER = $17.80/sf

Conclusion: Offer A delivers higher NER despite lower headline rent

```

Precedent Deviation Scoring

Categorize changes:

• Minor: Formatting, definitions (low risk)
• Moderate: Extended cure periods, additional parking (medium risk)
• Major: Tenant termination rights, unlimited assignment (high risk)

Recommendation:

• Accept: Minor deviations
• Negotiate: Moderate deviations
• Reject: Major deviations (or require offsetting concessions)

Amendment Tracking

Document evolution:

```

Original Lease (2020): Base Rent $15/sf, 5-year term

Amendment #1 (2022): Rent reduced to $14/sf (COVID relief)

Amendment #2 (2024): Expansion from 10K sf to 15K sf, rent $16/sf

Current Status: 15K sf at blended $15.20/sf, expires 2025

```

Purpose: Understand deal history for renewal negotiations

Competing Offer Red Flags

Too Good to Be True:

• Offer significantly above market (25%+ premium)
• Risk: Tenant may default or renegotiate
• Action: Verify tenant creditworthiness

Extreme Concessions:

• 12 months free rent on 3-year term
• Risk: Tenant desperate (weak credit) or savvy negotiator
• Action: Assess why tenant needs such concessions

Precedent Deviation Red Flags

Unlimited Assignment Rights:

• Standard form requires consent, tenant wants no consent required
• Risk: Loss of control over tenant quality
• Action: Reject or require recapture rights

Tenant Termination Option:

• Tenant may terminate with 90 days notice
• Risk: Lease instability
• Action: Reject or require significant termination fee

Liability Cap:

• Standard form unlimited liability, tenant wants cap at 1 year rent
• Risk: Insufficient damages for major breaches
• Action: Reject or require higher cap

Amendment Red Flags

Inconsistent Terms:

• Amendment says 5-day cure, but doesn't specify for what default type
• Risk: Ambiguity, unenforceable
• Action: Clarify all amendments

Undocumented Side Deals:

• Verbal agreement to reduce rent not memorialized
• Risk: Not enforceable, creates disputes
• Action: Formalize all changes in writing

This skill is automatically loaded when:

• User mentions: compare, comparison, amendment, precedent, deviation, benchmark, offers
• Commands invoked: /compare-amendment, /compare-offers, /compare-precedent, /lease-vs-lease
• Reading files: Multiple lease documents, amendments, offers

Related Commands:

• /compare-amendment - Compare amendment against original
• /compare-offers - Compare competing offers
• /compare-precedent - Compare against standard form
• /lease-vs-lease - General side-by-side comparison

Example 1: Competing Offers Analysis

Situation: Landlord receives 2 offers for 10,000 sf industrial space

Offer A:

• Rent: $10/sf/year
• Free Rent: 3 months
• TI: $5/sf ($50K)
• Term: 5 years
• Renewal: 1 × 5 years at market
• Tenant: Established distributor, B+ credit

Offer B:

• Rent: $11/sf/year
• Free Rent: 6 months
• TI: $10/sf ($100K)
• Term: 3 years
• Renewal: None
• Tenant: Startup, C credit

Economic Analysis:

```

Offer A:

NER: $9.20/sf/year

NPV: $380,000 (5 years)

Payback: 3.1 years

Offer B:

NER: $8.50/sf/year

NPV: $180,000 (3 years)

Payback: 5.2 years (exceeds term!)

Economic Winner: Offer A (+$200K NPV)

```

Non-Economic Assessment:

```

Offer A:

✓ Stronger tenant credit (B+ vs. C)

✓ Longer term (5 vs. 3 years)

✓ Renewal option (flexibility)

✓ Faster payback (within term)

Offer B:

✗ Weaker credit (startup risk)

✗ Shorter term (re-leasing sooner)

✗ No renewal option

✗ High TI, slow payback

```

Recommendation:

```

ACCEPT OFFER A

Rationale:

• Superior economics ($200K higher NPV)
• Stronger tenant credit
• Longer term reduces re-leasing risk
• Renewal option provides stability
• TI payback within term

Counter-Offer B: Would need $12.50/sf to match Offer A economics

```

Example 2: Amendment vs. Original - Tracking Changes

Original Lease (2020):

• Rent: $18/sf
• Term: 10 years (2020-2030)
• Use: General office
• Assignment: Landlord consent required

Amendment #1 (2022) - COVID Relief:

• Rent: Reduced to $15/sf for Years 3-4 (2022-2024)
• Years 5-10: Return to $18/sf
• Free Rent: 3 months (retroactive relief)

Amendment #2 (2024) - Expansion:

• Area: Increased from 5,000 sf to 7,500 sf
• Rent: New space at $20/sf (blended $18.67/sf)
• Term: Extended 2 years (now expires 2032)
• TI: $15/sf for new space ($37,500)

Current Status Summary:

```

LEASE EVOLUTION SUMMARY

Original Deal (2020):

- 5,000 sf @ $18/sf

- 10-year term

- Total rent over term: $900K

After Amendments (2024):

- 7,500 sf @ blended $18.67/sf

- 12-year term (extended)

- COVID relief: $45K rent reduction (Years 3-4)

- Expansion TI: $37,500

- Total revised rent: $1,680K (but paid $1,635K after COVID relief)

Net Impact:

- 50% area increase

- 20% term extension

- Minimal rent increase (blended rate)

- Landlord invested $37.5K TI for expansion

- Tenant remains through 2032 (positive)

Assessment: Favorable expansion - retains tenant, adds revenue, modest TI investment

```

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Skill Version: 1.0

Last Updated: November 13, 2025

Related Skills: commercial-lease-expert, effective-rent-analyzer, negotiation-expert, offer-to-lease-expert

Related Commands: /compare-amendment, /compare-offers, /compare-precedent, /lease-vs-lease, /market-comparison