commercial real estate: Pairing the right business with the right lease

Striking the right match between the landlord and the tenant in the real estate business is a rare thing. The needs of the landlord and the tenant can appear to be very contradictory. The landlord wants returns from the rent and enough control of the costs such that in the end they operate at a profit. The tenant, on the other hand, wants to keep their rental costs as low as possible. However, with quality property management in Henderson, it is possible to find a point of intersection for these needs.

 

An amicable relationship depends on the pairing between business and lease type. The type of lease is greatly dependent on the type of business the tenant runs. Retail businesses are the more common ones. Most retail business lines have seasonal demand, which means the sales vary over the course of the year. Some retail tenants would therefore prefer lower rent during the low season months. The percentage lease type is ideal for these types of businesses. The percentage lease typically requires the tenant to pay a certain amount of base rent, and on top of that pay an additional percentage depending on the volume of monthly sales they make. Percentage leases have a varied impact on the business depending on the location.

 

Many offices have a pretty even or steady flow of business all year round. The gross lease is ideal for this. The gross lease is popular in commercial real estate. There normally is a fixed monthly amount with the possibility of utilities. The tenant does not take care of any other obligations like maintenance or operation costs.

 

The manufacturing or industrial business will likely require a different type of lease. These normally are heavy utility users and therefore tend to be harder on the structure of the facilities than normal. They therefore require more repair and maintenance. The best lease type here is the triple net lease. Here, the tenant shoulders a significant amount of responsibility for operational expenses, as well as the insurance and tax related costs. The rents are fixed, so the landlord enjoys the advantage of fixed costs.

 

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