Case Study 2 – Rent Dispute
The client owns an entertainment complex adjacent to a non-owned office building and parking garage. The parking garage is shared by the client’s entertainment complex and the office building with rent paid by the client based on a long-term lease. Over time, the surrounding area has been further developed by the client creating additional retail, hotels, and parking, and the demand for the original garage lessened.
The client and owner of the office building could not agree upon fair market rent based upon the lessened demand under the terms of the lease. The client retained Mr. Hammerschlag to determine a fair market rent utilizing an unusual formula prescribed in the lease. He developed three hypothetical scenarios given historical parking data which was skewed by the pandemic. Mr. Hammerschlag’s experience as an owner gave validity to his analysis due to his knowledge of valuation from securing loans and undertaking financial risk on his own parking investments.