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| Percentage Leases and the Advantages of
Regional Malls Author: Peter F. Cowell and Henry J. Munneke Start Page: 239 Abstract: The differences in the
ownership structures of downtown retail districts and shopping centers may give rise to
varying space allocations and rental contracts found in these markets. This article
specifically examines the value-enhancing aspects of percentage leases and explores the
mechanisms of tenant mix, risk sharing and rent discrimination through which this value is
created. The use of percentage leases may lead to superior returns by allowing a rent
structure that approaches perfect price discrimination. Risk sharing through the use of
percentage leases may also create value for the property owner and lead to lower rents for
tenants. |
