Here are some more issues to be aware of when looking into commercial leases:
5. What is included in the CAM fees? A triple net lease should spell out the amount you have to pay toward “common area maintenance” expenses (CAM). CAM often covers the costs of security, snow removal, parking attendants, building management fees, building maintenance, etc. The easiest way to figure out a tenant’s share of CAM is to divide the number of square feet in your space by the total number of rentable square feet in the building. Since commercial leases do not always handle things in the easiest way, be sure to review your allocation of the CAM fees carefully.
6. Who is responsible for repairs? A commercial lease should also spell out who takes care of repairs for the building, the demised premises, the core building systems (electric, plumbing, HVAC, etc.), and the parking lot. The problem is not necessarily who pays for repairs, but whose job it is to make sure they actually get done. Often commercial tenants are responsible to the demised premise and any core building systems that directly affect the demised premises, while the landlord takes care of everything else.
7. Will a build-out be needed, and if so, who would pay for it? Sometimes commercial spaces require modifications, or a “build-out” because they are so generic. If this is the case, a commercial lease should state whether the cost of this build-out is the responsibility of the tenants or the landlords. If the landlord pays for the improvements, this cost is called an “allowance.” If improvements are needed, the lease needs to clearly address what the improvements will be, who will complete them, when they will be completed, and the allowance amount.
Educate yourself on these issues so that you are a prepared tenant!
If you would like to learn about available office space in Kansas City, give a commercial real estate broker in Kansas City a call at 913-685-4100!
