Retail Butcher Shop

Parties:

Family owned business major landlord; new lease; Tenant got “stitched up” with wholesale sales brought into percentage rent. Perhaps some misrepresentation going into lease.

Lease conditions / lease terms:

New 5 year lease; 18 months into lease;

Gross rent paid: $160,000 pa;

Ran software modelling: used industry benchmarks; similar butcher shop premises (rental evidence) supported circa $100,000 pa gross;

Outcome:

Tenant requested Landlord renegotiated new lease terms. Gave notice, paid out creditors and closed shop down and saved 3 ½ years of his life to do other things.

Comments:

Inflated rents may significantly inflate the value of any property. Prior to acquiring a property, test the veracity of the leases and rent levels.