Commercial Real Estate Leases

Important Information To Know:
Commercial properties can be leased with several types of Lease Agreements and it’s important to understand leases.

Full-Service Lease – this is where the owner is responsible for all of the operating expenses.

Net Lease – is a lease when a tenant pays some of operating expenses, most commonly the two major expense items being taxes, and insurance.

Triple Net Lease – is a lease when the tenant is responsible for “All” of the operating expenses.

This includes the three major expense items:

• Taxes
• Insurance
• Utilities

Also referred to as a Triple Net Lease or commonly referred to as a Net – Net – Net.

It is best to negotiate and set up a triple net lease where the tenant pays all of the operating expenses each and every month separately, and just sends you a check.

If the Net-Net-Net is not negotiated properly, then often times the tenant pays for most but not all operating expenses.

Note:

Multi-tenant office and retail buildings are usually leased on a triple net basis.

When it comes to the common area maintenance (CAM) this is done on, a pro-rata basis “split between any of the tenant’s”.

Net rent-able square footage means the space they occupy not the gross square footage that would include:

•   Hallways
•    Stairwells
•    Elevator Shafts
•   Lobbies, Common Meeting Area

To learn more visit http:www.terryhale.com