Leasing a commercial property involves significant research to choose the best lease for your circumstances. These are the three main commercial lease types to consider before you lease real estate.
Gross Lease Under the terms of a gross lease, a tenant pays a fixed monthly rate for all financial obligations, including rent, utilities, taxes, and maintenance fees. This is a convenient arrangement for tenants who prefer to avoid paying separate bills for all of their services. Although it requires a higher base rent than other lease structures, payments do not increase even if utility costs during a given period are higher. Net Lease This type of lease gives tenants various degrees of responsibility depending upon how it is structured. Tenants always pay a monthly base rent, but they may also pay for one or more costs, including property taxes, insurance, common area maintenance, or total building costs. Choosing to pay for all building costs under a leasing arrangement is uncommon as it can defeat the purpose of leasing. Modified Lease When choosing this type of lease, tenants and landlords agree to share the non-rent expenses. This lease represents a hybrid of the gross and net lease models, and its terms are subject to individual negotiations between a tenant and landlord. When you need to lease real estate for your business, consult with a commercial real estate service for advice about the best lease options for your circumstances.
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AuthorHello, my name is Roger Dennison and I'm a successful commercial real estate broker, with more than 20 years in the field. Archives
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