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Costs to Consider when Renting Commercial Real Estate

 Costs to Consider when Renting CRE

Today's Tenant Rep Tuesday Tip topic: Costs to Consider when Renting Commercial Real Estate

When tenants are looking at renting commercial real estate, they don't factor in all of the costs when comparing different buildings. Leasing space is more than just rent. There are a lot of other costs to factor in. 

Some properties include electricity in their rent while others make tenants pay for their own electric. Some landlords quote yearly rates while others quote monthly rates. Some Landlords have triple net (NNN) leases, while others have full service leases.

Costs to Consider When Leasing Commercial Real Estate

  • Rent – Be sure to determine how the landlord is quoting the rate (NNN or full service). Does it include operating expenses or not? Be sure to calculate and compare the total yearly and monthly for each property

  • Common Area Maintenance – Maintaining the common areas (e.g. garbage cleanup, parking lot maintenance, roof maintenance, etc.) is typically the responsibility of the landlord however they typically divide up the costs equally based on total SF in the building and pass that to the tenants. These costs are variable and can change depending on what is needed on the common areas.

  • Utilities – In some cases, the landlord includes utilities (e.g. water, electric, sewage) in your base rent while in other buildings the tenants are required to set up and pay for their own service. 

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