Leasing Tips.
About to sign a lease and don’t know where to start? There are 3 main types to know.
The secret is just knowing the type and your rights.
Tips on Knowing What Type of Lease.
Signing a lease can be confusing, so getting the basics right is essential
Finding the right office is a complex task and we are here to help simplify it. It can take up to 24 months to find the right space and execute an agreement and our goal is to shorten that with knowledge. Here are the few things to know about lease types.
Net Lease (Triple Net (NNN), double and single)
These leases are base rent + additional rent for the building’s operating expenses. A tenant is responsible for paying the base rent and a share of of common areas, taxes and insurance on the building. It is quoted on the square feet base, with an estimated fee (such as +$5.00 per square foot). The important thing to know that property costs should not be a money maker for landlords and just cover costs. an annual estimate on the total maintenance of the property and is subject to change. These leases are more common for retails and office spaces. The difference between the three is:
Triple: Tenant pays utilities and operating fees. It reduces rental fees because tenant pays into operating.
Double: the landlord pays structural maintenance expenses and multiple tenants split property and insurance expenses. It is also slightly reduced in rental fees.
Single: The landlord pays insurance and maintenance expenses.
Full Service Gross (FSG)
This lease is full service and is “all-in” basis. A tenant is not responsible for any other costs or expenses beyond the quoted rate. The owner or landlord pay common areas, taxes, insurance and utilities. These are the most common type for office properties, for a room and above.
Full Service or Gross Lease or Modified Gross (MG)
this type of lease are hybrid of triple net and full service lease. A landlord passes on a variety of building expenses such as common areas, utilities and taxes. This is typically added as a modified gross.
Know your rights:
There are variances to many of these types of leases, so consulting a broker or legal advisor is key the further the agreement deviates. Every contract is different and every contract is negotiable.
The most important thing is to know your rights. Don’t sign up for risk, whether the agreement is per square foot or all-in. Know the language and for small spaces flexibility is likely your biggest factor.
