Commercial Real Estate For Lease

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4% and 1.75% Net. What does this mean. Does it mean 4% on first years rent (base rent and operating costs) and then 1.75% on the balance of the year. OR is it the 4% on first year base rent excluding the operating costs. I am confused as to what the net after 1.75% means. Pleas advise.

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Hi The agreement with your lease negotiator should spell out the terms. If its still not clear call the leasing agent and ask him to put pencil to paper and show you the actual costs and how he calculated it.

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Talk to a Commercial Real Estate Agent.

I am looking for a building to open up a bar/club. The seller of the building has the option to either lease or purchase. I was hoping to set up a 'lease with the intent to purchase' agreement. If the selling price of the building is $250,000, what is a reasonable lease cost? Who pays for improvents to convert the interior and exterior? Who pays property taxes and insurance on the building? Should I receive discounts for permanent improvements I make to the building (such as adding bathrooms, bar, DJ booth)? Is it going to be difficult to get permits, if I don't own the building? What are some website or sources for 'lease to purchase' contracts? And on top of it all, the building might be historic and reside in an 'Empire Zone' (New York Sate's draft enterprize zone, for tax breaks to attract businesses). Any help or advice would be highly appreciated! Thanks.

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To lease or purchase depends entirely on crunching the number to see which is the best option depending on your budget and plans. Everything on commercial lease agreements is ofter negotiable such as deals with leasehold improvements where they are done by the landlord and your rent increases and you should negotiate a better rent deal if you do the improvements and increase the value of the property. Usually insurance on a building is only available to the owner but you need to insure the contents and consider business interruption insurance. Permits for the building should not be a problem but you will need to follow building codes and do upgrades as required by the city. There are limits to what you can do to a historic building in most cities. You should know all this before you sign a lease. At this level of investment it would be a good idea to contact a good business start up lawyer and a good accountant for advise. There are too many pitfalls to go in blind or on the advice of strangers.

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NNN means the tenant pays all expenses, including taxes, insurance, utilities, and all other operating expenses. There are many items which the Landlord will pay directly (i.e. taxes), but the tenant will have to reimburse the Landlord for it. I'm a Landlord with a lot of NNN leases, btw.

I know it probably state it in the contract, but I just wanted to see if there is anyone with personal experience. I have a tenant who's lease is almost up. Is there usually a time frame in which they have to renew the lease? Is there a standard rate in increasing the rent, which is not stated in the previous contract?

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