Case Detail

Case Summary

Tulaberry Plaza: Leasing Decisions in Commercial Real Estate

Case Number: 5-318-502

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Authors: Craig Furfine

Key Concepts

cash flow analysis, financial analysis, financial strategy, real estate, strategic positioning, valuation

Abstract

In January 2019, Benedict Clarke needed to address the vacancies at retail shopping center Tulaberry Plaza. The rise in online shopping forced Tulaberry's anchor tenant into bankruptcy and weakened the outlook for retail more generally. Clarke must devise a plan that presents the most logical and profitable way forward for the shopping center. The case asks students to make leasing decisions from the perspective of the property owner, Clarke, giving them an appreciation for both the quantitative and qualitative factors that influence optimal leasing decisions.

Learning Objectives

After reading and analyzing the case, students will be able to calculate the NPV of a lease and convert it into an effective rent; understand the limitations of using effective rents to drive lease decision-making; and qualitatively and quantitatively analyze a set of prospective tenants with the goal of making optimal leasing decisions in a retail real estate context.

Number of Pages: 10

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: Orlando, Florida, USA

Industry: Real estate management

Organization Name: Fictional

Organization Size: Small

Decision Maker Position: property investor

Decision Maker Gender: male

Year of Case: 2019