Real Estate Investment Real Estate Investing Guide for Beginners in Newca | Page 5

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Pros and Cons of Subleasing: Commercial subleases offer pros and cons to business
owners. Before you sign a sublease, be sure to weigh the advantages and
disadvantages of subleasing commercial space.
Understanding and Negotiating Commercial Real Estate Leases
Commercial leases are complicated and are very different from residential leases. Before
signing any commercial lease you need to know what questions to ask, and how to rent, load
fees and other added fees are calculated. Armed with knowledge you can negotiate the best
deal possible!
Women are just as capable of negotiating a good deal in commercial leases as men are but
negotiating starts with asking the right questions.
Once you have answers to certain questions, you can research more about types of leases,
leasing terms, negotiating commercial leases. You will also be better able to plan your
finances, and your negotiation strategies if you know what questions to ask.
 Question #1: What Type of Commercial Lease is Being Offered? The type of lease being
offered is probably the most important thing to consider first because it determines
how you will be charged rent. The terms of commercial real estate leases are defined
by the type of commercial lease.
 Question #2: Are the Terms of the Lease Negotiable? All commercial leases should
always have at least some room for negotiation, no matter how small. A completely
inflexible landlord is generally not someone you want to lease from because
"inflexible" often equates with "unreasonable."
 Question #3: What Insurance Coverage Does the Lease Require Tenants to Purchase?
Few business owners new to commercial leasing will look beyond their actual monthly
rent and utility costs when determining if a space is affordable, but you also need to
consider your insurance costs. Moving from a home-based business into "brick and
mortar" space will cost you more to ensure your business because, in addition to your
own insurance needs, your landlord will probably require you to purchase insurance
to protect him/her as well.
Terms You Need to Know to Understand Commercial Real Estate Leases
When you rent commercial space, you will often be paying for more than the actual square
footage you will be occupying. A landlord can easily take advantage of someone who does
not understand the difference between a Triple Net Lease (NNN Lease) and Double Net Lease.
While the difference may not sound like much, and NNN lease is the worst kind of lease for
any tenant to sign as it almost always favors the landlord.
Here are articles that will not only explain the different types of leases, but that also explains
how rent and added costs, like Common Area Maintenance (CAM) fees are calculated:
 Square Footage Formulas Used in Calculating Commercial Lease Rents: Why The Space
You Occupy is Not All That You Pay For
 Common Area Maintenance (CAM) Fees in Commercial Leasing: 101
 Commercial Leases - Square Footage Used in Calculating Commercial Leases
 Average Percentage Rents Charged in Commercial Leases