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Jun 24

Written by: GCP Broker
6/24/2009 10:31 AM 

Most modern commerical leases will include sections which will attempt to a) recover expenses extended by the landlord at the building, and b) create a profit making center.  Be very careful of this section and make efforts to reduce/restrict it as much as possible.

Items you will often see in this section are insurance, taxes, common area maintenance, capital expenditures or improvements, property mangment fees, support staff fees, security fees, landscaping, general building maintenance, office managment fees, building advertisment fees, it can get exhasutive so be mindful of them all. 

The inclusion of additonal rent can be a very tricky situation as it is one of the key places where extraordinary efforts to obtain  reasonable rent and concessions can be blow away if not properly examined.  I do not think it is necessary for a landlord to bear all expenses however, some will try to pass through an entire slew of expenses which are more property categorized as landlord/developer business costs.  The tenant has paid the base rent and should contribute to the upkeep of the building and or costs associated with their presence in the building  but beyond these points, becasue they are directly related to the tenants current and future at the locaiton, every Landlord desired expense should be reveiwed and negotiatied.

Remember our rule, everything in a commercial lease is negotiable.    

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