Parker Properties, developer of the 1.7-million-sf The Summit office complex in Aliso Viejo, is one landlord that goes beyond a company's financial statements in determining whether to lease it space. "We want to understand their business, who the sponsors are, what is the expected 'burn rate' of the capital raised and the prospects of raising additional capital," says Lee Redmond, a Parker principal.

"To the extent they don't have an operating history or [record] of generating revenues or profits, or if they are still uncertain as to what their future will hold, we start to look at ways to enhance the lease" to protect the developer if the dot-com fails, Parker adds.

Among the issues that landlord must consider: How much rent will be lost if the tenant breaks the lease agreement, the cost of readying the space to attract a future tenant, and the cost future brokerage commissions.

To cover such costs, Redmond says Parker Properties may require a tenant to provide a year's worth of rent plus future tenant improvement costs, as well as leasing commission outlays. That compares to a security deposit equal to only two or three months' rent that a landlord might charge to a more traditional company with a long history of revenue and profit.