Industrial Gross Lease - Types of Commercial Leases - Part 1
Industrial Gross Lease - This lease type is common in multi-tenant industrial properties. This warehouse lease type requires the tenant to pay one base monthly rent which covers the property expenses, management and Common Area Maintenance (CAM). This lease usually has a provision which allows the landlord to recoup increases in expenses beyond a base year. The base year establishes a basis for which to calculate the increases in subsequent years which can be passed thru to the tenant.
Leasing Overview Information
For an overview of this and other common Commercial Real Estate Lease types, go here.
For a more comprehensive guide written by a commercial real estate broker covering entering into a commercial lease agreement, go here.
A commercial lease is, at least in general, a detailed specification of what property you will gain access to as a tenant, along with the responsibilities of tenant and landlord in terms of the elements of the property and the expenses involved. There are many different types of leases. Each should be analyzed carefully to see that they meet your expectations. Divvying up who will pay for what costs - now and throughout the life of the lease - is a major aspect of any lease. Some (many if not most, I hope) of these costs categories are summarized in the table below:
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A big part of a lease is outlining how these and other expenses are divided between 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.
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