Tenant requirements come in many sizes,
ranging from a 2,000 square foot retail space to a 400,000 square foot office building. The Alliance Group offers you ways to scrutinize tenant credit throughout that spectrum, with budgets that can range from $300 to $4,000.
Each option offers a deeper level of tenant scrutiny.
You will be able to gain increasing levels of certainty about the strength of a particular tenant and obtain increasingly specific and insightful opinions about the strengths and weaknesses of a tenant over the life of a lease.
Choose an Option That’s Right for You
Document Review & Verbal Discussion
This Level enables us to provide a quick and inexpensive “read” on a company’s financial condition. We serve as a second pair of eyes in reviewing financial statements (public or private), looking for anomalies that hint at financial problems or operational problems.
While somewhat cursory, this Level is designed for scrutiny of tenants where square footages and TI investments will be relatively small and/or available financial documents are limited. Our analysis includes a review of financial statements that are typically internally generated. The goal is to highlight any areas of obvious financial or operational weakness that might exist.
Tenant Credit Review
Our most popular option, this Level provides an in-depth review of a tenant’s financials over a 3-to 4-year period, with the emphasis on understanding long-term trends in key financial areas. Our analysis includes discussions with management about areas of concern and issues that require clarification.
Tenant Credit Report
This is our most rigorous level of tenant scrutiny and the one that will provide the highest degree of certainty about the level of tenant risk involved in a lease. It includes a rigorous analysis of all aspects of a company’s financial condition, as well as an examination of market-related issues, including a peer group analysis that measures the target company against its key competitors.
In many cases, the analysis of a lease guarantor becomes the primary focus in determining the level of tenant risk in a leasing transaction. This is particularly true in situations where the credit of the actual tenant is weak, and a lease guarantee from a financially strong parent becomes a necessary requirement for completing a lease negotiation.
There are leasing situations where a public parent company is unwilling to provide financial information for a subsidiary that is negotiating a lease, and the Parent is reluctant to serve as the guarantor. As an alternative to scrutinizing the financial condition of the tenant or guarantor, we analyze the strengths and weaknesses of the Parent’s financial condition.