How well do you know your leasing vocabulary? Here are a few commercial leasing terms to be familiar with before you enter into negotiations for an office space lease:
- Base Rent – This is also known as contract rent, and is the minimum rent payment due to your landlord. It is typically a fixed amount of rent paid periodically. Any increases in rent are calculated based on your annual base rent.
- CAM cap – This is the maximum amount which you as a tenant are required to pay for your share of common area maintenance costs. Anything above that amount is the responsibility of the landlord.
- Cost of Occupancy – The sum of all of the costs that go into renting and maintaining a space. This includes rent (or mortgage payments), as well as recurring costs such as taxes, repairs, operating expenses, and any other costs related to your use of a property.
- Due Diligence – The process of examining a property, related documents, and leasing or purchasing procedures to reduce potential risk and make sure that the actual property matches the information presented.
Be aware of these terms so you are not blindsided by confusing jargon when negotiating a lease!