Posted by John Behle on January 12, 1999 at 12:29:32:
I haven’t had a problem with it, but that doesn’t mean it couldn’t happen. I read Bronchick’s comment about above market rents, so that might be a problem. I’ve given tenants 50-100% of the option amount based on market rents. I don’t inflate it because it is an option. The lease and option are different, which helps enforce the two different rights (pros and cons to that).
The option is limited to a short time period and market conditions need to justify taking this overly generous route. Again, most of the tenants are not able to take advantage of the option later, so the generous offer doesn’t cost me. It does result in a wonderful tenant (very well SCREENED).