TURNING THE ART OF RETAIL LEASE EVALUATION INTO A SCIENCE: DEFINING AND UNDERSTANDING THE PROBLEM AND THE CONSEQUENCES

Donald Evan Gilbert

The Valuation Journal, 2021, vol. 17, issue 2, 38-69

Abstract: Valuation of retail leases is increasingly inaccurate as industry moves away from substantive analysis. While simplification is partly understandable, the vast oversimplification that has occurred is disastrous for the retail sector, the economy, and the environment. Current practice excludes from the retail lease valuation process every applicable valuation, economic, legal and accounting concept/analysis that contributes to consistent, robust and accurate valuations. Key concepts ignored include: market value, effective rent, reasonable rent, matching supply & demand (willing landlord/willing tenant), contract law (fully informed parties), auditing, accountability, business goodwill, and IFRS 16 guidelines.

JEL-codes: D46 E32 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vaj:journl:v:17:y:2021:i:2:p:38-69

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