Evening star., 1936-11-14
ROS|NSK| TALKS
: TO REALTY CLASS
Discusses Fundamentals OF
Selling and Leasing Com
merciaI Property.

leasing commercial property were
outlined this week by Carl G. RoSin-
ski, Capital realtor. to the 81 students
enrolled In the real estate study course
which Is sponsored jointly by the
washington Real Estate Board and
Southeastern University.
In discussing the commercial prop
erty branch of the real estate busi-
ness, Rosinski said:
Actually the real test Of the value
of a business property Is the rental
a qualified merchant can pay Tor It's
occupancy, based upon the volume OF
business that can be done In the prem
ises, charging himself the proper per-
centage of rental, which can be paid
on the merchandise sold. In this
connection, it undoubtedly will be in
teresting to know that the percentage
of volume which different businesses
can pay as rental, varies greatly. l
have studied number Of charts which
have been made up by leading real
tors all over the country and hnd
that these percentages vary from a
low point Of 212 per cent up to as nlgn
as 20 per cent to Is per cent.
Must Look to Future.
Future possibilities, Of course, de-
termine to a great extent the value
of business real estate, particularly
In the suburban area. If the property
Is so located that the residential I'M
movement of the surrounding terri
tory will increase the shopping popu-
lation of the particular business CEN
ter, 1t is natural to expect that MS
property win increase in value. 1here-
fore, in determining the actual value
of any property, we can anticipate the
future improvement Of the surround
ing area and, therefore, increase us
value proportionately.
"The next most important thing IN
determining the value Of business
prouerty Is It's size. Frontage, OF
course, is most important. With the
tendency today towards bigger and
better stores, frontage plays very
important part in determining prop
erty value. Property enjoying large
area, therefore, particularly as to
frontage, is more valuable than that
restricted to a small area, by reason OF
the fact that, in restricting the size
of a business property you naturally
restrict 1t to small business.
While frontage plays a very 1mpor-
tant part in the valuation, we must
not forget that depth, too, Is OF major
Importance"
In discussing suburban business
centers Rosinski made reference 70
the parking shops which have recent
ly been erected in Washington, as
well as to several which are planned
and stated that such business CEN
ters are becoming more and more
popular, stating that "for best de-
yelopment, suburban business centers
should be situated so as to draw from
large surrounding residential neigh
borhoods, and also from arterial
traffic, at a point where conditions
cause it to slow down"
Percentage Lease Important.
In the various types Of leases
Rosinski pointed out that the per-
centage lease Is the most important
type of lease in the higher-priced
properties inaSmuch as it Is rental
contract which provides for the pay
ment Of rental based upon q certain
percentage of the net business done
by the tenant in the property. In
discussing this type of lease Rosinski
stated: In my opinion, the per-
centage lease is the fairest kind OF a
lease that can be drawn between
landlord and tenant, because the
owner shares in the tenants pros
perity. At the same time the tenant
is taking a lesser gamble than he
would normally take, in that he must
pay only that percentage of his vol
ume which he can afford to pay as
rental. In percentage leases which
contain a minimum guarantee clause
the tenant is still protected on a
straight rental basis, making his
gamble, therefore, less than he would
find should he sign up for the then
value of the property. The owner is
always protected under this type OF
lease, in that he will collect on all
the business the property will pro-
duce, while at the same time the ten
ant is not required to sign up to pay,
as he did in the days prior to 1929,
when tenants would agree to pay
any rent to get 100 per cent loca-
ton, with the result that after 1929
one by one fell by the wayside and,
while the owner had a very fine,
well-drawn lease calling for an at
tractive rental, he either had to ad-
Just the rental downward or he found
his tenant in bankruptcy and could