If you are thinking about renting an office space for your business, there are a few terms you should be familiar with before you start the process. Knowing these terms will give you a better idea of what your business is looking for and will help you understand the language of landlords and commercial real estate attorneys. Here are a few words and phrases to know, as suggested in the article “Vocabulary for Commercial Real Estate”:
- Common Area Maintenance – also called “CAM” fees, this is the amount of additional rent that a tenant must pay for the maintenance of common areas on the property, including the cost of landscaping, insurance, lighting outside the building, property taxes, and the cleaning of common spaces.
- Gross Lease – a type of commercial lease in which a tenant pays a flat rental rate that covers all of the expenses that the landlord takes care of, such as insurance, maintenance, taxes, and utilities.
- Net Lease – a type of lease in which the tenants pay for the operating costs of the building themselves.
- Escalation Clause – a clause in an office space lease that gives the landlord the ability to raise the rent to accommodate inflation, tax increases, and operating costs.
- Letter of Intent – a preliminary document formed by the landlord and tenant stating their agreement to begin lease negotiations. Often both the tenant and landlord utilize the help of legal experts at this stage of the process.
- Vacancy Rate – the percentage of all the space available in a property that is considered vacant or unoccupied at the time.
- Occupancy Rate – the percentage of spaces in a commercial property that are occupied at a given time.
- Usable Square Footage – the square footage number of the space that the tenant rents solely for their use, which includes both the office space itself and their private areas such as storage closets or restrooms.
If you are beginning to search for commercial real estate, it is a good idea to familiarize yourself with the vocabulary of the process. Doing a little research and seeking expert help can save your business money in the long run if it means you get a better lease deal.
If your business is interested in commercial space for lease in Overland Park, Give a commercial real estate broker in Overland Park A call at 913-685-4100. We can answer any questions you have about our available office spaces and even set up a tour for you!