Sticker rent rarely tells the whole story. Here’s how to lease space with eyes wide open.
Lease types
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Triple-Net (NNN): You pay base rent plus operating costs (property taxes, building insurance, common-area maintenance/CAM). OpEx is reconciled annually.
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Gross / Full-Service: Higher sticker price but includes many/most operating costs; confirm what’s included (janitorial, utilities, HVAC).
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Modified Gross: A blended middle ground; definitions vary—get it in writing.
Key numbers
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Usable vs rentable area: Hallways/mechanical rooms are added to your bill via a load factor.
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Operating cost history: Request 2–3 years of actuals to sanity-check the budgeted NNN.
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Parking ratio & signage: Impacts customer flow and brand visibility.
Clauses that matter
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Use & exclusivity: Protects your category (e.g., no competing dental clinic next door).
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Improvements (TI): Who pays for build-out? Negotiate TI allowance, free rent, or fixturing period.
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Personal guarantee / security: Understand recourse and strategies to limit exposure (larger deposit, rolling burn-off).
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HVAC & maintenance: Who services and at what schedule/costs?
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Renewal options & rent steps: Lock in fair renewals; avoid surprises.
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Hours of operation: Especially relevant in mixed-use or strata complexes.
Pro-forma your “all-in”
Base rent + NNN + utilities + janitorial + waste + insurance + staffing + loan payments (if any). This is the number that determines success—model conservatively.
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