When you sign a commercial lease
, you’re making a commitment to that space for a pre-determined amount of time. While that time period is probably obvious to you, the total cost of your lease may not be. Sometimes, other fees are hidden within your rent schedule and they could be difficult to decipher. Here are 3 critical things to look at BEFORE you sign on the dotted line.
All square footage is not created equal:
In its simplest form, square footage describes the physical size and boundaries of a space. However, every market measures buildings differently. Whereas some will measure to the inside of an exterior wall cavity, others, will only measure the usable square footage. If you are paying rent based on price per square foot, this could make a significant difference in your monthly rent.
Commercial Lease Tenant Improvement Packages May Cost You More
Tenant improvement packages are great marketing tools to entice tenants to choose their building. However, most landlords amortize tenant improvement costs into the rent schedule at an interest rate of 10% or higher. These costs can add up VERY quickly and you may be paying more in rent than you had intended.
Beware of Hidden Fees in Common Area Maintenance Expenses:
Common Area Maintenance, or CAM, is a common expense you pay with a long-term lease. It is intended to cover miscellaneous charges for the building use such as parking lot maintenance, lighting, landscaping, etc. However, oftentimes hidden in there are asset management or property management fees that the landlord tries to pass on to the tenant. Make sure to get a list of what CAM expenses are included in your lease.