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Questions to Ask About Industrial Space Lease Terms, Rent and Other Fees

Added Fees Can Increase Your Monthly Rent on Commercial Leases

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Filed in: Leasing Commercial Office, Retail and Industrial Spaces

General Questions to Ask Lease Terms Before Leasing Industrial Spaces

While restrictions and lease conditions are important considerations to factor in when looking for commercial industrial space, for most new businesses, how much the monthly rent will cost is often the deciding factor. Commercial leases can have added fees in addition to rent. Be sure you understand what additional costs are by asking questions, including:
  • What is the base rent on usable square footage? Many commercial leases have a base rent, that is, what you pay for the actual square footage of the space. But "loads" and "CAM" fees may be added to this rate, increasing your monthly rent.
  • Are the terms of the lease negotiable? Negotiable terms include the base rent, free rent, security deposits, length of the lease, how much your rent and fees can be increased each year, and lease renewal options, etc.
  • Are there costs in addition to rent? Are there any special taxes, property fees, load fees, CAM or other fees? If so, get them in writing. Make sure each fee is identified individually, how much each fee will cost you, and how often you will have to pay the fee(s).
  • What will it cost you in the future? How much can your rent (and any other fees) be raised each year? What is the maximum percent or dollar amount your rent and other fees can be raised each year? If there is a 1% cap each year on load fees, that may sound reasonable, but this does not mean your base rent will be capped at 1%. To make up for low caps on other fees, your landlord may try to stick you with a 15% rent increase.
  • What is included in rent? What taxes, utilities, and services (landscaping, security, etc.) are covered in your lease, or that you are required to pay on your own?

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