Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m A P R I L 2 0 1 7 23 want the option to lease adjacent prem- ises or have first purchasing rights if the landlord chooses to sell the building. But not only is the landlord's income derived from the lease, it also deter- mines the value of the building. Ken- nedy points out that older leases look much different from today's lease partly because the value of the building is no longer determined by its bricks and mortar. "Today, very little attention is paid to how much it cost to build it; it's more the leasing revenue that's associ- ated with it that affects the value. So leases have become the financing tool." A tenant who remains for a longer term allows the landlord to forecast revenues out longer and lower turnover means less administration and less wear and tear to the premises, adds Garth Anderson, a partner with Blake Cas- sels & Graydon LLP in Calgary. But the long-term leases, as they reach their end, start showing their age. Anderson has seen ground leases with no mention of the environment or environmental concerns, providing no direction in the event of contamination. Also, how the square footage of a build- ing is measured using standards set by the Building Owners and Managers Association has changed, so the same space may not contain the same square footage as it did a decade ago. The lease, with all its flexibility, serves a number of different objectives, and it's likely to become even more complex in the future, says Kennedy. "How you deal with that real estate and how the landlord deals with that real estate can be altered in the terms of the lease so that each party gets the rights that they want," he says. "I think we're going to see more and different types of leasing arrangements." And that, he concludes, likely means more work for lawyers. TODAY, VERY LITTLE ATTENTION IS PAID TO HOW MUCH IT COST TO BUILD IT; IT'S MORE THE LEASING REVENUE THAT'S ASSOCIATED WITH IT THAT AFFECTS THE VALUE. SO LEASES HAVE BECOME THE FINANCING TOOL. GARTH ANDERSON, Blake Cassels & Graydon LLP *Insurance by FCT Insurance Company Ltd., with the exception of commercial policies, which are provided jointly by FCT Insurance Company Ltd. and First American Title Insurance Company. Services by First Canadian Title Company Limited. The services company does not provide insurance products.. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. ®Registered Trademark of First American Financial Corporation. FCT protects you before, during and after * a real-estate transaction. Get protected today. Residential Solutions 1.866.804.3122 Commercial Solutions 1.866.804.3112 Untitled-1 1 2017-01-18 10:35 AM

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