If you're a business owner looking to rent a space to conduct business, you may need to negotiate the amount you will pay to lease the property. When negotiating the terms of a commercial lease, it will help you to have an understanding of the market and general prices in the area where you want to rent. This article will talk about several factors you may want to keep in mind when negotiating your commercial leasing arrangements.
The location of the property and the current market conditions surrounding the property will influence the amount you need to pay in rent for the property you want. In many cases, property owners will determine rent amounts by establishing an annual cost per square foot for the property and multiplying that by how many square feet you plan to rent. After arriving at this figure, the landlord will divide the annual cost by 12 months to arrive at the monthly rate. In the final rent amount, the landlord may include additional costs that account for the upkeep of shared common areas, utilities, taxes, insurance and maintenance.
Here are a few commercial leasing terms you should know:
Gross lease: In this arrangement the landlord will pay for insurance, utilities, taxes and repairs.
Net lease: In this arrangement the tenant will pay for insurance, utilities, taxes and repairs.
Double net lease: Here, the tenant pays rent and also pays the landlord for property taxes and insurance.
Triple net lease: In this arrangement, the tenant pays rent and also pays the landlord for insurance, repairs, taxes and utilities.
There is a lot to think about when negotiating the terms of a commercial lease. With an experienced real estate lawyer on your team, you can navigate these issues with ease.