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Full-Service Lease: Understanding Types of Commercial Leases - Part 3

Last Updated May 9, 2023

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The Cogs of Industrial Leasing | Warehouse FinderA Full-Service Lease, typically applicable to multi-tenant office buildings, offers one monthly rate that encompasses all costs associated with the property, such as electricity, janitorial services, management, property taxes, and property insurance. This lease type allows the landlord to pass along any increases in expenses to the tenants each year. This increase is calculated by taking the actual expenses for a given year and subtracting the Expense Stop established in the lease. A highly similar lease type used in the Industrial & Flex market is the Industrial Gross Lease.

Leasing Overview Information

For an overview of this and other common Commercial Real Estate Lease types, visit our Types of Commercial Real Estate Leases article.

For a more comprehensive guide written by a commercial real estate broker covering entering into a commercial lease agreement, read our article on Entering Into a Commercial Lease Agreement - A Guide From a Broker.

A commercial lease is generally a detailed specification of the property you will gain access to as a tenant, along with the responsibilities of the tenant and landlord in terms of property elements and expenses involved. There are many different types of leases, and each should be analyzed carefully to ensure they meet your expectations. Dividing up the costs - now and throughout the lease duration - is a major aspect of any lease. Some common cost categories are summarized in the list below:

  • Expense Category
  • Base Rent
  • Insurance
  • Taxes
  • Property Improvements
  • Property Repairs
  • Common Area Maintenance (CAM)
    • Landscaping
    • Mowing
    • Maintenance
    • Janitorial
    • Security
    • Supplies
    • Food Service
    • Vending
    • Etc.
  • Utilities
    • Water
    • Electricity
    • Sewer
    • HVAC
    • Sanitation
    • Telecomm
    • Networking
    • Etc.

A crucial part of a lease is outlining how these and other expenses are divided between the landlord and tenant and how these expenses can vary over time for the tenant, which can and probably should be limited by caps applied in the lease.

Are you looking for warehouse, office, or other space in Houston or elsewhere? Do you need to renew your lease? Contact Warehouse Finder using our Get Started link at the top of the page, call us at the phone number in the upper right corner, or chat with us using our chat widget on the page in the lower right corner.

Our team of licensed real estate agents and brokers, who specialize in commercial real estate, is here to help you find the right space for your business needs and guide you through the leasing process.

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