The lease in the current real estate business

With the entry into the country of investment funds specialized in investing in real estate assets with income generation capacity and the creation of local investment funds in this asset class, the real estate sector has been changing its business model and has focused on the development of real estate projects to place in the market square meters in lease under schemes that allow an adequate administration of the asset.

Under this model, the lease must be an instrument that collects the agreements of the parties to safeguard investment conditions and generate new investment opportunities, such as the issuance of securities on the asset itself or on the income generated by this or schemes for financial leverages such as lease back.

The actors that structure and negotiate leases are called to understand the reality of the real estate business, in order to maintain the conditions on which the investment was made, promote the conservation of the real estate asset, since its value is a reflection of the underlying lease agreement that the most used valuation methodologies of real estate assets take into account, and maintain alignment with the accounting concepts of the International Financial Reporting Standards.

The lease contracts must contemplate mechanisms to carry out opportunely, and with an efficient control of the cost, the locative repairs and maintenance of the asset (including the equipment adhered to the property, such as elevators or air conditioners) to avoid detriment. The landlord or designated asset manager must be allowed to make repairs with recovery powers to the lessee, who has a legal obligation to assume them.

Likewise, the leases must contemplate early terminations in certain terms with penalties borne by the financial model of the business and the depreciation of the construction and improvements of the asset; and schemes of guarantees for the fulfillment of the obligations of payment by the lessee, such as the constitution of compliance policies, letters of credit, bank deposits and security interests, with powers for the landlord to make periodic reviews of the financial statements establishing some solvency indicators that indicate when to activate them.

The leasing contracts must be flexible to the financing needs that the landlord may have, so that said contracts or the assets on which they fall may be subject to guarantees for the obtaining of credits; an alternative for this is the fiduciary scheme, where an autonomous patrimony is constituted to which the contract is assigned so that it receives the rents and serves as a vehicle for the financing through the issuance of guarantee certificates or movable guarantees on the rents or fiduciary rights.