(* Disclaimer: Okay, okay - Real Estate does tend to throw a few knucklers, but we'll get you through them.)
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A commercial lease encompasses your agreement with your landlord, details your rights to occupy and utilize the property you are leasing, and specifies what you will pay to your landlord and to others related to the property you are leasing - basically, your rights and obligations with regard to the subject property.
A lease type, or category - like NNN, or Triple Net - is a generalization of the terms of that type of lease for purposes of quicker communication. The term used doesn't define the lease completely, but does say a lot to a Commercial Broker, and should say a lot to a commercial tenant. The terms are used a lot in the business, so it is worth reviewing the types and reading brief articles about each. A good starting point for your reading is probably our article entitled Entering Into a Commercial Lease Agreement - A Guide From a Broker. This article, as well as much of what is discussed in this article, is summarized and linked below.
Many terms are defined in the articles referenced in this section including Common Area Maintenance, Expense Caps, Lease Types like Modified Gross, Net Lease, Full Service Lease, Triple Net (NNN) Lease, and Industrial Gross Lease - to mention a few.
In Commercial Real Estate leases, Common Area Maintenance, or CAM, refers to activities related to areas and items shared between tenants in a multi-tenant building or complex…
In Commercial Real Estate Leases, an Expense Cap typically refers to expenses that are passed along from the landlord to the tenant for Common Area Maintenance of a building…
In Commercial Real Estate, a Modified Industrial Lease involves modifications to the Industrial Gross Lease. The modifications can vary, but the tenant often pays for certain items contributing to a Multi-Tenant building’s Common Area Maintenance…
In Commercial Real Estate, there tends to be confusion regarding the difference between a Gross and a Net Lease - and variations of each…
Full Service Lease - Generally applicable to multi-tenant office buildings, this lease has one monthly rate and covers all the costs associated with the property including electrical, janitorial, management, property taxes and property insurance…
Triple NNN or Triple Net - A NNN lease is set up to have the Tenant pay a base rental amount each month to the Landlord. In addition to the base rent, the Tenant also reimburses the Landlord monthly for the tenant’s pro-rata share of certain estimated expenses (“reimbursables”)…
The industrial gross lease is common in multi-tenant industrial properties. In an industrial gross lease, the tenant is responsible for some, but not all, or the operating expenses of the property. This warehouse lease type requires the tenant to pay one base monthly rent which covers the property expenses, management and Common Area Maintenance (CAM).
In my 29 years of commercial real estate leasing, both in warehouse and office, I have seen hundreds of lease documents with many arrangements of rent and responsibilities. The basic and most used leases are as follows…
Here are five quick tips to remember when renewing your office or industrial lease:
Overview Committing to a lease for 3, 5, 7, or 10 years is a monumental consideration for a business. Whether that is moving into the first property or from one location to another, entering into any commercial lease agreement can be stressful, time-consuming, and requires adequate research and qualified commercial real estate brokers, attorneys, and possibly even engineers to determine the most suitable location(s)…
Learn about important issues regarding commercial warehouse leasing, buying and building…
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