Question

For most commercial property types, lease lengths can vary considerably. Therefore, both parties must tradeoff between the advantages and disadvantages associated with particular leasing terms. Owners may prefer longer leases for all of the following reasons EXCEPT:

Answer 1

Answer:

Gain flexibility

Explanation:

Flexibility in business refers to continually trying to become more efficient and able to generate a higher profit.

When you sign longer contracts, you know how much money you are going to pay (the lessee) and receive (the lessor) in advance for several years. That reduces uncertainty and risks, but it also reduces (or almost eliminates) the possibility of higher returns since your investment becomes inflexible.