tenant-delinquency-workout

A cash-for-keys agreement can be optimal when eviction timelines are lengthy and re-leasing costs are high. Comparing its NPV against a lease workout and eviction scenario quantifies the immediate payout versus lost rent and carrying costs, revealing if an early vacancy is financially superior.

Comparing a lease workout against eviction plus re-lease involves modeling cash flows against state-specific eviction timelines and market rent dynamics. The workout path avoids downtime and re-leasing TI/LC costs, whereas eviction risks extended vacancy but may achieve higher long-term market rent.

Structuring a tenant delinquency workout requires profiling the tenant to diagnose root causes, differentiating temporary cash flow issues from structural problems. This classification, alongside state-aware timelines and covenant impact analysis, tailors the workout response to the specific delinquency scenario.

Assessing DSCR and occupancy breach risk when modifying a delinquent tenant lease requires incorporating loan covenants into your cash flow projections. This quantifies how the modified lease terms affect debt service coverage and building occupancy, highlighting potential default vulnerabilities.