certified leasing specialist...5/17/2016 1 ©2016 certified leasing specialist cls global...

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©2016

Certified Leasing SpecialistCLS Global Certification Brief

Andrew Carlson, CRX, CSM, CLS

VP-Retail Brokerage, JLL (AM)

ICSC Professional Certifications

Why CLS Matters…For our industry:

• Elevate Professional Standards• Recognize Industry Leaders

For your company:• Identify Emerging Leaders• Enhance Individual Performance

For you:• Increase your worth and recognition• Achieve highest professional standards

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Certified Leasing SpecialistDomain 1. Development and Market Research Fundamentals (10%)

Domain 2. Leasing Fundamentals (20%)

Domain 3. Long-term Leasing (10%)

Domain 4. Short-term Leasing (10%)

Domain 5. Legal (13%)

Domain 6. Design & Construction (9%)

Domain 7. Retailing (13%)

Domain 8. Finance (10%)

Domain 9. Operations, Marketing and Promotions(5%)

Domain 1

Development & Market Research Fundamentals

• Market Planning and Analysis

• Competition/Void Analysis

• Trade Area (catchment area) Analysis

• Market Share

• Types of Centers and Anchor Selection

• Site Planning/Analysis

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• Business Climate/Industry Trends

• Retailer Site Selection Process

• Redevelopment

• Public/Private Cooperation

• Development Landlord and Retailer Incentives

• Entitlement Process

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Which of the following is a psychographic measure of a

trade area?

A. Household income levels

B. Number of children and adults per household

C. Educational level of the population

D. Newspaper preferences of the population

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Which of the following is a psychographic measure of a

trade area?

A. Household income levels

B. Number of children and adults per household

C. Educational level of the population

D. Newspaper preferences of the population


The population of a trade area can indicate which of the

following for a shopping center?

A. Its potential business volume

B. Its probable profit margin

C. What size store will be most successful

D. What length lease term will be most profitable


The population of a trade area can indicate which of the

following for a shopping center?

A. Its potential business volume

B. Its probable profit margin

C. What size store will be most successful

D. What length lease term will be most profitable

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Domain 2

Leasing Fundamentals

• Tenant Prospecting and Evaluation by Developer

• Merchandise Mix and Tenant Mix

• Establishing the Leasing Plan

• Structuring the Deal

• Economics of Total Occupancy Costs (TOC)

• Remerchandising

• Brokers/Tenant Representatives

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Leasing FundamentalsA landlord wants to recapture a tenant's space prior to lease expiration and is willing to negotiate a buyout. Which of the following is the most important component for the landlord to consider in determining a fair value for the location?

A. Trade area demographicsB. Location of the shopping centerC. Unamortized tenant allowance

D. Prevailing market rents

Leasing FundamentalsA landlord wants to recapture a tenant's space prior to lease expiration and is willing to negotiate a buyout. Which of the following is the most important component for the landlord to consider in determining a fair value for the location?

A. Trade area demographicsB. Location of the shopping centerC. Unamortized tenant allowance

D. Prevailing market rents


In a food-court lease, a tenant's cash contribution

to the landlord is commonly referred to as a:

A. construction allowance

B. maintenance or utility fee

C. negative allowance or key money

D. guarantee

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In a food-court lease, a tenant's cash contribution

to the landlord is commonly referred to as a:

A. construction allowance

B. maintenance or utility fee

C. negative allowance or key money

D. guarantee


Which of the following is most important to a leasing

specialist who is prospecting for a high-fashion specialty store?

A. Merchandised well within category

B. Attractive storefront display

C. Outstanding store fixtures

D. Multiple store locations


Which of the following is most important to a leasing

specialist who is prospecting for a high-fashion specialty store?

A. Merchandised well within category

B. Attractive storefront display

C. Outstanding store fixtures

D. Multiple store locations

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Domain 3

Long-Term Leasing

• Long-term Leasing Prospecting

• Pad/Freestanding/Outlot

• Proposal/Letter of Intent (LOI)

• Tenant Improvement (TI) Allowance

• Key Money

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Long-Term Leasing

Which of the following is essential to a landlord's

letter of intent?

A. Assignment/sublet provisions

B. Rental deposit requirements

C. Basic business terms

D. Expiration date of offer

Long-Term Leasing

Which of the following is essential to a landlord's

letter of intent?

A. Assignment/sublet provisions

B. Rental deposit requirements

C. Basic business terms

D. Expiration date of offer

Long-Term LeasingFrom a landlord's perspective, and after financing has been obtained, the most important reason for including an operating covenant in a department store agreement is to obtain:

A. small-tenant leases

B. temporary-tenant leases

C. increased market rents

D. longer lease terms

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Long-Term LeasingFrom a landlord's perspective, and after financing has been obtained, the most important reason for including an operating covenant in a department store agreement is to obtain:

A. small-tenant leases

B. temporary-tenant leases

C. increased market rents

D. longer lease terms

Domain 4

Short-Term Leasing• License Agreement

• Revenue Generating Sources

• Setting Fees (short-term “rents”)

• Short-Term Leasing Prospecting

• Common Area Limitations

• Visual Merchandising

• Operations

• Securing, Sponsorship, Advertising and Events

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Short-Term Leasing

A space in a center has a width of 25 feet to the centerline between each of the stores on either side of it and each sidewall is 1ft. thick. The space is 100 feet deep from the outside of the store front to the inside of the rear wall, which is also 1ft. thick. The measurement of this space is how many square feet (sf)?

A. 2,400 sf C. 2,500 sf

B. 2,424 sf D. 2,525 sf

Short-Term Leasing

A space in a center has a width of 25 feet to the centerline between each of the stores on either side of it and each sidewall is 1ft. thick. The space is 100 feet deep from the outside of the store front to the inside of the rear wall, which is also 1ft. thick. The measurement of this space is how many square feet (sf)?

A. 2,400 sf C. 2,500 sf

B. 2,424 sf D. 2,525 sf

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Short-Term LeasingWhat is an early warning sign of a poorly performing short-term merchant?

A. Late openingsB. Adding merchandise which is not part of the use clauseC. Delinquent rent paymentsD. No return policy

Short-Term LeasingWhat is an early warning sign of a poorly performing short-term merchant?

A. Late openingsB. Adding merchandise which is not part of the use clauseC. Delinquent rent paymentsD. No return policy

Domain 5

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Legal

• Lease/License Terminology

• Defaults and Remedies

• Other Legal Concepts

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LegalA tenant has a lease that does not permit assignment. The tenant subsequently files for bankruptcy under Chapter 11. Under the authority of the bankruptcy court, which of the following statements is true?

A. The tenant has a maximum of six months in which to file a reorganization plan.

B. The tenant must immediately close all of its unprofitable stores.

C. The tenant is prohibited from borrowing money.D. The tenant is permitted to assign its lease to a creditworthy tenant with a consistent use.

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LegalA tenant has a lease that does not permit assignment. The tenant subsequently files for bankruptcy under Chapter 11. Under the authority of the bankruptcy court, which of the following statements is true?

A. The tenant has a maximum of six months in which to file a reorganization plan.

B. The tenant must immediately close all of its unprofitable stores.

C. The tenant is prohibited from borrowing money.D. The tenant is permitted to assign its lease to a creditworthy tenant with a consistent use.

LegalA fidelity bond is defined as:

A. A bond marketed to gather money for an investment.

B. A state-issued bond marketed to finance a shopping center.

C. An insurance policy that covers employee theft of

dishonesty.

D. An insurance policy that covers customer shoplifting.

LegalA fidelity bond is defined as:

A. A bond marketed to gather money for an investment.

B. A state-issued bond marketed to finance a shopping center.

C. An insurance policy that covers employee theft of

dishonesty.

D. An insurance policy that covers customer shoplifting.

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Domain 6

Design & Construction

• Terminology

• Environmentally Accepted Practices

• Pricing and Costs

• Construction Process

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Design & Construction The problem of division of responsibility for various

construction items in a store can best be resolved through which of the following?

A. Lease proposals

B. A construction lease exhibit

C. Site inspections

D. Tenant's plans and specifications

Design & Construction The problem of division of responsibility for various

construction items in a store can best be resolved through which of the following?

A. Lease proposals

B. A construction lease exhibit

C. Site inspections

D. Tenant's plans and specifications

Design & Construction Leasehold improvements are defined as:

A. only those improvements that can be removed

without damaging the premises.

B. only those improvements that can be removed easily.

C. permanently affixed improvements only.

D. all improvements.

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Design & Construction Leasehold improvements are defined as:

A. only those improvements that can be removed

without damaging the premises.

B. only those improvements that can be removed easily.

C. permanently affixed improvements only.

D. all improvements.

Design & Construction Before tenant construction begins, all of the following should be received from the tenant EXCEPT:

A. Execution of the lease

B. Building permit

C. Certificate of insurance

D. Certificate of occupancy

Design & Construction Before tenant construction begins, all of the following should be received from the tenant EXCEPT:

A. Execution of the lease

B. Building permit

C. Certificate of insurance

D. Certificate of occupancy

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Domain 7

Retailing

• Mathematics of Retailing

• Terms and Definitions

• Categorization of Retail Stores

• Multi-channel Retailing

• Retailer Financial Statements and Metrics

Retailing

• Occupancy Cost-to-Sales Ratio

• Retailer’s Brand Strategy and Business Plan

• Sales Performance by Type of Retailer

• Supply Chain Management

• Retailer Seasonality

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Retailing

A juniors' store and a misses' store are best

differentiated by which of the following?

A. Price points

B. Depth of merchandise selection

C. Age of target customer

D. Fashion-forward focus

Retailing

A juniors' store and a misses' store are best

differentiated by which of the following?

A. Price points

B. Depth of merchandise selection

C. Age of target customer

D. Fashion-forward focus

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RetailingWhich of the following would NOT be caused by

poor stock turnover?

A. Outdated merchandise

B. Restricted open-to-buy

C. Excessive markdowns

D. Lack of inventory

RetailingWhich of the following would NOT be caused by

poor stock turnover?

A. Outdated merchandise

B. Restricted open-to-buy

C. Excessive markdowns

D. Lack of inventory

RetailingJoanne’s Jeans is looking to meet with a developer to move her street-front store into a mall location. She is concerned about the type of information that the developer will ask her to present at her meeting. What should she take to the meeting?

A. Copy of her current leaseB. Pictures of her storeC. Marketing planD. Business plan

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RetailingJoanne’s Jeans is looking to meet with a developer to move her street-front store into a mall location. She is concerned about the type of information that the developer will ask her to present at her meeting. What should she take to the meeting?

A. Copy of her current leaseB. Pictures of her storeC. Marketing planD. Business plan

Domain 8

Finance • Setting Budgets

• Reforecast

• Pro Forma

• Project/Center Profit and Loss [P&L] Statements

• Market Value of Project Center

• Net Effective Rent (NER)

• Basic Financial Terminology

• Owner’s Objectives

• Stakeholder, Ownership and Management Types

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FinanceA tenant signs a 10-year lease and agrees to a $20-per-

square-foot (psf) rent with a $40-psf tenant allowance. An

interest rate of 10 percent is used and the amortized rate is

16.27 percent. From the landlord's perspective, what is the

approximate net effective rent?

A. $20.00 psf C. $15.60 psf

B. $16.00 psf D. $13.50 psf

FinanceA tenant signs a 10-year lease and agrees to a $20-per-

square-foot (psf) rent with a $40-psf tenant allowance. An

interest rate of 10 percent is used and the amortized rate is

16.27 percent. From the landlord's perspective, what is the

approximate net effective rent?

A. $20.00 psf C. $15.60 psf

B. $16.00 psf D. $13.50 psf

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FinanceA profit and loss statement measures a retailer's performance over a period of time and shows which of the following?

A. Income and expense only

B. Income, expense and receivables

C. Income, expense and inventory

D. Income, expense and net worth

FinanceA profit and loss statement measures a retailer's performance over a period of time and shows which of the following?

A. Income and expense only

B. Income, expense and receivables

C. Income, expense and inventory

D. Income, expense and net worth

FinanceAssuming a capitalization (cap) rate of 10 percent and a net operating income (NOI) of $460,000, the value of the property is $4,600,000. If the cap rate is down 2 points to 8 percent, then the value of the property will be?

A. Increased by $1,150,000 C. Increased by $920,000

B. Decreased by $1,150,000 D. Decreased by $920,000

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FinanceAssuming a capitalization (cap) rate of 10 percent and a net operating income (NOI) of $460,000, the value of the property is $4,600,000. If the cap rate is down 2 points to 8 percent, then the value of the property will be?

A. Increased by $1,150,000 C. Increased by $920,000

B. Decreased by $1,150,000 D. Decreased by $920,000

Domain 9

Operations, Marketing and Promotions

• Basic Terminology

• Business-to-Business (B2B) Marketing to Attract Leasing Prospects

• Use of Social Media and Digital Marketing

• Common Area Maintenance (CAM)

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Operations, Marketing and PromotionsAn 800,000-square-foot shopping center contains four department stores, W, X, Y, and Z, each containing 100,000 sf. The lease on a 2,000 sf space states that the tenant will pay its pro rata share of CAM expenses, less the amounts paid by department stores X, Y and Z only. The tenant's pro rata share is defined as the proportion its demised premises bear to the gross leasable area of the shopping center, less the amount of space occupied by department stores X, Y, and Z only. Each of the four department stores contributes $25,000 to CAM. The total CAM costs for the center are $575,000. In this situation, the 2,000 sf. tenant is responsible for how much CAM?

A. $1,500 C. $2,375B. $2,000 D. $2,500

Operations, Marketing and PromotionsAn 800,000-square-foot shopping center contains four department stores, W, X, Y, and Z, each containing 100,000 sf. The lease on a 2,000 sf space states that the tenant will pay its pro rata share of CAM expenses, less the amounts paid by department stores X, Y and Z only. The tenant's pro rata share is defined as the proportion its demised premises bear to the gross leasable area of the shopping center, less the amount of space occupied by department stores X, Y, and Z only. Each of the four department stores contributes $25,000 to CAM. The total CAM costs for the center are $575,000. In this situation, the 2,000 sf. tenant is responsible for how much CAM?

A. $1,500 C. $2,375B. $2,000 D. $2,500

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Operations, Marketing and PromotionsWhat would typically be listed in a tenant’s operational audit performed by the landlord in a center?

A. Walkways in front of the store are clean and well-maintained

B. Storefront: all materials are in good repair (windows, moldings, flooring, wood trim, etc.) and are maintained according to center standards

C. Windows are clean and with new and up-to-date merchandise

D. The cash register is new and less than 3 years old

Operations, Marketing and PromotionsWhat would typically be listed in a tenant’s operational audit performed by the landlord in a center?

A. Walkways in front of the store are clean and well-maintained

B. Storefront: all materials are in good repair (windows, moldings, flooring, wood trim, etc.) and are maintained according to center standards

C. Windows are clean and with new and up-to-date merchandise

D. The cash register is new and less than 3 years old

CERTIFICATION EXAM

INFORMATION AND LOGISTICS

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• Computer-Based Testing

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• Appointments Necessary

• First come -First Served Basis

• Re-tests Available

Certification Testing Windows

June 18-26, 2016

Applications due May 30

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Applications due September 10

Application Fees

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Certification Eligibility $95 $195Exam Appointment $395 $795

$490 $990

JTR School AttendeesEarn up to $400 off!

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Exam Format & Regulations

Format

• Arrive 30 Minutes Early

• Take Tutorial

• 3 ½ Hours for Exam

• 100 Questions

• Multiple Choice

• 15 Minute Break

What to Bring on Test Day

• Approved Calculator

• Government Issued ID

What is Provided

• Lockers for personal items

• Scratch Paper

Testing Tips

• Be prepared

• Budget your time

• Read questions Carefully

• Eliminate answers you know are wrong

• Always answer the question-there is no penalty for guessing

Exam Preparation and Study Aids

• Exam Specifications

– These blueprints provide you with a detailed and organized list of domains and knowledge areas you will

be tested on

• Shopping Center Study Series

– 12 webinars covering key concepts in the retail real estate industry

Available online at www.icsc.org/CLS

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• Knowledge Assessments & Practice Tests

– In key areas available online, anytime

• Publications

– While there is no single publication that will prepare a candidate, many professionals use publications to

augment their study

Available online at www.icsc.org/CLS


• John T. Riordan Schools⎻ Fast-rising executives, ambitious newcomers and experienced

industry professionals come together for 3-5 days engaging in coursework designed to provide attendees with an unparalleled curriculum that is uniquely customized with regional concepts, issues and case studies.

⎻ Upcoming school is September 25 - 29, 2016 in Miami, FL.

Visit www.icsc.org/education

Questions & Discussion

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