One of the most popular questions I receive pertains to the difference between “triple net” and Gross lease rates. Most retail and industrial spaces are leased on a “triple net basis.” This basically means that the tenant is responsible for payment of real estate taxes and operating expenses. The Landlord essentially gets all of the rent proceeds. Triple net can essentially be broken down into 3 components: real estate taxes, operating expenses and utilities. The real estate tax bill associated with a property can be billed by the municipality directly to the tenant or the Landlord will bill the tenant as the property tax bills are issued on a quarterly basis. The former arrangement would be more common in a single tenancy building since the cost for taxes are not shared. Continue Reading
I have helped many entrepreneurs with buying properties to accommodate the space needs for their businesses. The purchase of a commercial property may be the most significant asset the business owner obtains so it is important to understand the value and potential that this asset represents. This is a complex process that requires a number of steps.
First, one must identify their own space requirements. The business owner may need assistance with this initial space programming process and account for future expansion and space requirements. Then the search begins to identify and tour alternative properties. Most often, solutions for the ideal property solution is not readily available. The business owner will need to rely on the resources of his or her broker to fully investigate alternative properties and identify opportunities as they arise. It is also helpful for the business owner to talk to his or her lender to understand financing alternatives and qualify the ability to obtain financing to acquire property and relocate the business. Continue Reading
As a seasoned professional in the commercial real estate industry, I am often asked about current market conditions and what I foresee for the future. After many years of practice in this industry, I can say unequivocally that the commercial real estate industry is directly tied to the state of the economy. In recessionary times, vacancies will rise and lease rates will fall as unemployment increases and demand for space falls. During times of economic growth, the converse is true. At the end of a weak quarter of production, invariably the GDP and other economic barometers will confirm that the economy had experienced weakness. Continue Reading