Commercial rental properties include shopping malls, professional offices, strip centers, and free-standing buildings used for offices and retail space. Successful businesses are reluctant to change location unless more space is needed and there's no other option. Capturing a good tenant in an office or retail space can mean many years of dependable rental income and positive cash flow. The tenant will be reluctant to move if it can't be sure it will be able to maintain the level of business it enjoys in its current space.
These tenants often pay for repairs and improvements as well, depending on the type of lease. Lease types are often based on the tenant's type of business. This can be expressed either as an annual or a monthly amount:. The tenant pays a minimum base monthly rent in this case, then adds a percentage of all gross receipts over a certain base amount.
We don't set a bottom-line revenue before the percentage kicks in with this option. Rent is paid on all gross receipts from zero. Using the same numbers as above, the calculation works like this:. Entrepreneur Staff. June 2, 2 min read. More from Entrepreneur. Get heaping discounts to books you love delivered straight to your inbox.
Sign Up Now. Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level. Join Now. Try risk free for 60 days. Start My Plan. Ultimate Guide to Link Building. Entrepreneur Voices on Elevator Pitches. Entrepreneur Voices on the Science of Success. Entrepreneur Voices on Growth Hacking. Factors in the cost of an office include building class , building amenities doorman, lobby, etc , and neighborhood.
As we mentioned, the affordability of office space is largely contingent on your location. And even within cities, the office space cost can largely vary.
Some landlords will stipulate a percentage increase for every year, others prefer a fixed amount. Your broker can help you negotiate these rent increases. Usable square footage USF refers to the office space leased for your exclusive use. Technically, the landlord is leasing these building areas to you as well. Essentially, loss factor tells you how much of a markup there is on your total monthly or annual rent. Landlords will often contribute to the renovations with what is called a Tenant Improvement Allowance TIA , a sum of money to help cover renovation costs.
Throughout the office leasing process, a broker can help you manage costs and find savings wherever possible. At SquareFoot, our brokers are equipped with proprietary data and technology to make the most painful parts of finding office space faster, easier, and more transparent.
SquareFoot is a new kind of commercial real estate company. Our easy-to-use technology and responsive team of real estate professionals delivers the most transparent, flexible experience in the market.