Commercial Real Estate Tenant FAQ
What is the difference between net, double net, triple net, gross, modified gross and full service leases?
Anything that is not a full service lease will have additional expenses above and beyond the base rent. These costs are net costs. The key to ask is what is NOT included in the rent. This can be anything from property taxes to common area maintenance charges. Often times the type of lease and pass through expenses may be mislabeled. Asking what charges are not covered in the base rent will help you quickly clarify what additional expenses you may need to add to the budget.
How do I know which type of lease is the best for my business?
Of course, the less pass through expenses the better. Different types of buildings often offer different types of lease structures. Often offices have full service gross or modified gross leases with limited foot traffic, whereas retail properties may have more foot traffic, but higher pass through expenses. The trade off from from added business due to foot traffic over the potentially higher cost of pass through expenses can help you make the best decision on which location brings the best return.
What is the difference between rentable and usable square footage?
Usable square footage is the actual space that you occupy. Rentable square footage is the usable square footage plus the tenant’s pro-rata share of the common areas, including the lobby, stairwells, public restrooms, etc. The difference is called the load factor.
What incentives are owners currently offering?
Property owners may currently offer free rent, tenant improvements (TI) allowances, or moving allowances as common incentives to attract new tenants. This is not always the case; however, in a down market more incentives become available to tenants.
How much time will it take to successfully relocate my business?
The moving process can vary widely depending on the condition of the new space you are planning on moving into. If the space is move-in ready, you may not need much time at all. However, if there is a great deal of work to be done, you will need time to draw up plans, hire contractors, and obtain permits. You should allow up to 6 months to completely and successfully relocate your business. The more time you have, the more time you can use it towards your advantage in the negotiation and planning process.
How do I sort through all of the available properties to find the space that works best for my company?
Finding the perfect space can be a daunting task. There are several listing companies that have sort functions which allow you to organize properties based on your specific needs. An experienced broker can help you cut through the “noise” and find a great location for you. Contact us today for a free consultation!