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Useful information for commercial property tenants.
There is more to finding the best property to lease other than just the size and location. A commercial property lease is a long term commitment and we can help you to get the most for your money. Even if we don't have a property available that fits you specific criteria we can professionally represent you in finding one that does.
We are experienced at assisting tenants of all types of commercial property and, as the property owner generally pays our commission, the assistance that we offer may often be at no out of pocket cost to you. We can help you find the type of property that meets your criteria and is still within your budget.
If you would like a free consultation regarding you own unique commercial property needs please contact us.
Important Considerations When Leasing
Base Cost - The base cost for a commercial rental property is generally specified as $XX.XX/Square Foot. This is an annual amount but is often the base cost only, not the total amount.
CAM - CAM is the acronym for Common Area Maintenance. It is an additional cost paid by the tenant to cover items such as cleaning, landscape maintenance, and building upkeep. Items such as property taxes are sometimes added into the CAM fee as well.
Escalation Clause - Most commercial leases will contain an escalation clause. This indicates the amount that the rent will automatically go up each year. It is a very important consideration in a long term lease.
Term - The term is the amount of time that a commercial property is leased for initially. This can vary from 3-25+ years depending on the needs of the tenant. Most property owners do, however, prefer to have at least a 5 year initial lease.
Option Periods - The option period(s) are the periods that the tenant may choose to exercise to remain in the property after the expiration of the initial lease term. The conditions under which the tenant may elect to exercise an option should be carefully spelled out in the initial lease. Option periods are generally from 3-10 years with 2-4 such option periods built into the lease.
Build out and tenant improvements - The chances of finding a property that fits your needs as-is are slim and quite often alterations will need to be made to the property. The owner of the property may be willing to cover or share some of these costs but it should all be carefully spelled out in the lease.
Maintenance - The roof and structural maintenance of the commercial property are generally covered by the property owner (with the exception of a NNN lease). The tenant should have inspections preformed on any system or equipment that they will be responsible for prior to committing to it.