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Understand Types of Commercial Real Estate Leases

There are several types of rental offices are available to you as a tenant and it is good to have a basic understanding of what they are and how they work. You will hear the following terms when it comes to leasing negotiations.

Types of office lease are as follows:

Full-service lease- includes all fees cleanliness, maintenance costs of electricity, and public areas. You may see the letters "FS" next to the rental rate when you are leasing an office. You can check this out to know about real estate leases.

Net Lease – this is a lease where the tenant pays a significant portion of the property taxes and insurance costs or operation of the property issued by the owner or owners of office property. You as the tenant will also pay its own electricity and other utilities you.

Net Lease – also commonly known as a triple net lease. This is a lease where the tenant pays for their pro-rated share of the operating costs incurred by the property owner or owners. These expenses are passed through to you as a tenant, you will hear the basic fee which means the language in the first year you occupy office space or "base year".

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This lease Gross- modified gross lease rental full service where operational costs incorporated into the rate but you will most likely pay for your own electricity.

Escalations- rental rates increased or bumps per year is standard with most leases. You should expect a rise in per year. You can also hear the lease referred to as pass the lease.

Rent Index – rent is linked to the consumer price index will move up or down in relation to the consumer price index.

Percentage Leases- percentage lease is that the tenant pays the sales revenue related to the tenant. You will find this type of lease is used in retail properties for rent. The percentage is negotiated and linked to your gross sales.