It’s all fine and good to use this series to give you the insider knowledge of commercial real estate but without the basics it won’t get you very far. Sure, we throw around terms like “$22/square foot, triple net”, “CAM charges” and “TIs” but do we all really know what it means?
When looking for a new place to do business there are so many things to consider that throwing in a whole other language (it feels that way sometimes) is enough to make the most educated of us feel overwhelmed. So, this is where we will start:
Lease Types
- Net – Tenant pays a share of the property taxes in addition to rent
- Net-Net (Double Net) – Tenant pays a share of the property taxes & insurance in addition to rent
- Triple Net (this is the most common in our area) – Tenant pays a share of property taxes, insurance and CAM (common area maintenance*)charges
- Gross (Full Service) – Tenant pays rent which already includes the operating expenses of the building
Lease Provisions
- Tenant Improvements (TI) – Interior improvements provided by the landlord
- Usable Square Feet – Area within exclusive control of the tenant
- Rentable Square Feet – Area within exclusive control of the tenant including pro rata share of common areas
- Common Area Maintenance (CAM) – The pro rata share of the maintenance of the common areas (including parking lots, hallways, landscaping etc.)
Condition of Property at Delivery
- As Is – Landlord will make no changes or improvements
- Vanilla Shell – Includes some TIs such as drywall, basic paint and possibly restrooms
- Gray/Dark Shell – No improvements have been done since construction. Space will usually be open walls with no restrooms
Understanding your lease is an important part of feeling confident in making the decision to move your business. As always, the staff at SL Bade & Associates is available to you to answer any questions you may have about your specific real estate needs. Feel free to call or visit us www.bade-associates.com for assistance.
