CRECI Commercial Lease Analysis 2

Question 1

In a percentage lease, what does the 'breakpoint' refer to?

Accepted Answer

The sales volume at which percentage rent kicks in

Answer

The rent escalation trigger date

Answer

The point at which a tenant can terminate the lease

Answer

The maximum rent cap in the agreement

Question 2

Which lease clause grants a tenant the right to match any competing offer before the landlord accepts it from a third party?

Accepted Answer

Right of first refusal

Answer

Right of first offer

Answer

Subordination clause

Answer

Co-tenancy clause

Question 3

A 'gross-up' provision in a commercial lease typically benefits the landlord by:

Accepted Answer

Adjusting operating expenses to reflect full building occupancy

Answer

Increasing the tenant's base rent each year

Answer

Allowing the landlord to pass through capital improvements

Answer

Permitting rent increases tied to CPI

Question 4

Under a triple-net (NNN) lease, which of the following costs is typically the LANDLORD'S responsibility?

Accepted Answer

Structural repairs to the roof and foundation

Answer

Property taxes

Answer

Building insurance premiums

Answer

Common area maintenance

Question 5

What is the purpose of an 'estoppel certificate' in commercial real estate?

Accepted Answer

To confirm the current status and terms of a lease for a third party

Answer

To certify tenant creditworthiness to lenders

Answer

To prevent a tenant from subletting the premises

Answer

To document rent arrears owed by the tenant

Question 6

A 'holdover' clause in a commercial lease addresses what situation?

Accepted Answer

A tenant who remains in possession after the lease expires

Answer

A tenant who pays rent late repeatedly

Answer

A landlord who delays delivering possession

Answer

A tenant who sublets without permission

Question 7

Which type of rent escalation ties annual increases to changes in the Consumer Price Index?

Accepted Answer

Index-based escalation

Answer

Stepped rent

Answer

Percentage rent escalation

Answer

Fair market value adjustment