Calculate the FULL cost of your office lease
One of the deciding factors that determine which office space to rent is cost. It's important that you understand the costs associated with leasing commercial property before you sign on the dotted line.
Calculating the monthly cost of renting office space is not as simple as you might think. It's not just the cost per square foot that you need to consider, you need to be certain what is included in the base rate. Are there any common area maintenance (CAM) costs, such as maintaining stairways, lobby areas and common rest rooms. Are you responsible for paying property taxes, insurance, utilities and trash collection?
As a starting point, you need to be aware of the various lease options, and the way in which costs are calculated:
Triple Net Lease
A triple net lease means that the tenant pays taxes, insurance and maintenance in addition to the rent. The landlord usually has no responsibilities relating to the upkeep of the premises, so it's up to the tenant to keep the building in good condition and pay for the cost in doing so.
Full Service Lease
Some office leases are quoted as a full service lease. This agreement includes the base rent, along with taxes, insurance, maintenance, as well as utilities and janitorial. The best thing about a full service office lease is that you will not be affected by any fluctuation in utility prices or taxes. The price remains the same throughout the term of the lease.
It's easy to feel confused when looking at the various leasing options and work out the best option that suits your financial and operational needs. Use the Moving Office Budget Template to help calculate your leasing costs so that you know what costs you're in for before you sign. Your Tenant Rep Broker will help you estimate your utilities and operation costs in the new premises so you can plan ahead and avoid any unforeseen costs further down the line.
Check out the Moving Office Budget Planner here.
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