What You Need To Know About Commercial Property For Rent
Your business is growing and you are ready to make a move. If you are looking at a commercial property for rent, it is not like renting your first apartment. The rules of the game are much different. Here's what you need to know.
Length of lease
The first thing you need to be aware of is the length of the lease. Commercial leases are usually 3-5 years, with some going as long as 10 years. This is a big commitment and you need to be comfortable with the length of the lease.
Rent increases
Another thing to be aware of when you need a commercial property for rent is that commercial leases typically have clauses that allow for rent increases. This is something that you need to be comfortable with, as it can have a big impact on your business.
Build-out costs
Build-out costs are often a big part of commercial leases. This is the cost of making the space usable for your business. This can be a significant expense, so you need to be aware of it. If you are just starting out, you may want a commercial property for rent that is move-in ready.
CAM charges
Common area maintenance charges, typically referred to as CAM charges, are often included in commercial leases. These charges cover the cost of maintaining common areas, such as parking lots and lobbies.
Rentable vs. usable space
When you are looking at a commercial property for rent, you need to be aware of the difference between rentable and usable space. Usable space is the space that you will actually be using for your business. Usable space includes common areas like the lobby, which you will also be part of your lease.
Types of leases
There are multiple types of commercial property leases, including:
- Full-service. These leases include a portion of the cost of utilities, janitorial services, and other common expenses.
- Net lease. These leases require you to pay for your own utilities and janitorial services.
- Absolute NNN. Also called a triple net lease, this type of lease requires the tenant to pay for all of the common expenses, including property taxes and insurance.
Commercial leases can be complicated, so it is important to know what you are getting into before signing anything. When you are ready to move your business to a new location, be sure to work with a licensed commercial real estate agent. This is not a process that should do alone.
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