Walk a Kb or Two in my Moccasins- Nobody 'splained it to me like that!

Simple answers to Complex Questions and Complex Answers to Simple Questions. In real life, I'm a Greater-Toronto (Canada) Realtor with RE/MAX Hallmark Realty Ltd, Brokerage. I first joined RE/MAX in 1983 and was first Registered to Trade in Real Estate in Ontario in 1974. Formerly known as "Two-Finger Ramblings of a Forensic Acuitant turned Community Synthesizer"

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Monday, September 18, 2006

Sale of Crown Assets (only to Lease them back)

Dear Globe Editor,

The same "watch the Operating Statement-nevermind the Balance Sheet" dolts who thought up the recent RCMP Headquarters deal are at it again.

Your article Government to eye property shakeup today makes me shudder when you outline the complexity of thought & process that these bureaucrats have devised (or have been convinced to consider).

Assuming these Crown-asset buildings are free of any encumbrances and that the departments using them are being charged an "occupancy fee" in lieu of rent (at least as an accounting entry), why not just refurbish the buildings (deferred-maintenance was the "big problem being solved" referred to in the story) with the proceeds of an "Equity-Take-Out" new first mortgage.

Surely a new mortgage for 40-50% of the building's value could supply enough money to re-fit the buildings to 21st Century standards (that's what the gov't will expect a REIT to do as part of the lease-back) and the department occupying can just pay a 'cold cash rent' for 20-25 years until the mortgage is retired.


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