Modern lease monetisations : How to capitalise on market arbitrages to significantly reduce occupancy costs

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Abstract: This paper introduces the concept of lease monetisation and details this lucrative strategy, which allows occupiers to generate a significant cash incentive from restructuring their lease to reduce their occupancy costs even further, while securing long-term control of an asset without an ownership interest or investing their capital. This paper explains the lease monetisation process, including the way corporate occupiers can decrease occupancy costs through long-term leases by taking advantage of arbitrage opportunities in the capital markets, the types of properties suitable for lease monetisations and the importance of corporate credit.

Keywords: lease monetisation; mission-critical facilities; cap rates; investment partner; value arbitrage; profit participation; cash incentives; lease restructure; investment-grade credit

Bob Mohr is Founder and Chairman of Mohr Capital, a Dallas-based commercial real estate investment company that acquires, develops and value enhances corporate office, industrial and retail properties. Since its inception in 2000, the company has completed more than US$2.5bn in transactions. Prior to founding Mohr Capital, Bob served as Chairman and CEO of Mohr Partners, a global corporate real estate advisory company. He formed Mohr Partners in 1986, amid Dallas’s great economic and real estate downturn, and when he sold the company in 2017, it served occupier clients in more than 70 countries through 24 US offices and three international alliances. A native of Indiana, Bob is a current Board Member of the Fitzgerald Institute for Real Estate at the University of Notre Dame and previously served on the Board of the Real Estate Council.

Rodrigo Godoi is Managing Director of investments for Mohr Capital, a Dallas-based commercial real estate investment company that acquires, develops and value enhances corporate office, industrial and retail properties. He oversees the entire life cycle of an investment and takes a hands-on approach from the concept phase of a project through to its completion. Rodrigo has actively built Mohr Capital’s investment portfolio by resolutely managing nationwide acquisitions and dispositions of office, industrial, hotel and ground lease assets. He has executed more than US$2bn of transactions in his career. Originally from Santos, Brazil, Rodrigo holds a Bachelor of Science in economics from Louisiana State University and a master’s degree in real estate from Cornell University. He is a member of NAIOP and is actively involved in the Cornell Real Estate Council’s Dallas Chapter.

Elizabeth Loving is Senior Adviser at Mohr Capital, a Dallas-based commercial real estate investment company that acquires, develops and value enhances corporate office, industrial and retail properties. She also serves as Director for Mohr Partners, a global corporate real estate advisory firm. In her role at Mohr Capital, Elizabeth collaborates and strategises lease monetisation opportunities for corporate users occupying office, retail and industrial speculative and build-to-suit properties to reduce occupancy costs and create value through their real estate. At Mohr Partners, she advises and oversees corporate real estate portfolios across North America. Elizabeth is a licensed real estate professional and holds Bachelor’s and Master’s degrees in music with a concentration in voice performance from Texas State University and Roosevelt University, respectively.