5 Good Reasons You Need Representation

1.  Your Landlord wants you to pay more rent.
If you are negotiating directly with your Landlord or their representative, remember that they look after the Landlords’ best interest…not yours.  They will use any information they have at their disposal to negotiate the best deal for the Landlord, which often means higher rent and more restrictive lease terms for you.  Protect yourself and a professional to look after your best interest.

2.  Use market conditions to your advantage.
A commercial real estate professional can help you look at all the options and give you market knowledge.  Most likely there are multiple properties that will suit your needs, why not put multiple offers out there and take the best one?  Even if you intend on staying in your current location, when your landlord finds out you have other options available and an agent working for you, they will be more likely to cut you a better deal.

3.  Negotiate favorable lease terms.
Landlords are not going to offer you the best lease terms, but if you hire a professional to help you, these terms can be negotiated directly into your lease.  Items like renewal options with predetermined rents, right of first refusal, free rent clauses, money for tenant improvements, or buyout clauses are some terms that could be negotiated on your behalf.

4.  Save your time.
Driving around and calling on signs is not the most efficient way to find space.  From a sign, it is hard to tell the size of the space, the price, the landlord motivation, or any other item that a professional may know about the property before calling.   Hiring a professional to assist you will save you time when they do the upfront leg work and present you with the properties that suit your needs, and help you through the contract negotiations. 

5. Peace of mind.
When the deal is inked, it is nice to know your best interests have been protected throughout the real estate negotiation process.  Knowing you are paying a fair rent and have a fair lease, gives you one less thing to worry about.

PS.  When you're looking for someone, you might as well hire the best and get a CCIM to work for you.

In various industries we use acronyms, nicknames, or abbreviations that don’t make sense to someone not in the business.  I decided to give you a cheat sheet of sorts for various commercial lease types common in the commercial real estate world.  It is important to read the lease and ask questions, because these lease types can mean different things to different people.  Not asking the questions, can be very expensive to you (landlord or tenant!).

Various Lease Types

Absolute Net (True NNN)
Tenant pays a base rent plus ALL expenses associated with the property…even capital improvements!  The NNN stands for net-net-net (taxes, insurance, & maintenance). Found most commonly in corporate retail leases and sale-leaseback transactions.

Triple-net (NNN)
Tenant pays base rent plus all operating expenses associated with the property. Typically excludes capital improvements. This means the tenant will be paying property taxes, insurance, and maintenance.  Found in many retail property leases (i.e. Walgreens, O’Reilly’s, etc.), newer industrial properties, and single tenant buildings.

Double Net (NN)
Tenant pays a base rent plus their share of taxes and insurance. This can also be the tenant paying taxes and maintenance or tenant paying insurance and maintenance.  Found occasionally throughout various property types.

Modified Gross (Mod Gross)
This is the most variable type of lease. Tenant typically pays a set rent plus some of the operating expenses.  I see this most often as tenant paying rent plus utilities.  This is a common lease structure for many, mostly smaller, properties from industrial, to office, to apartments.

Full Service Excluding Janitorial (FLSVEJ)
Tenant pays a set base rent plus any janitorial they may desire.  Landlord pays all operating expenses of the property excluding janitorial. Found commonly in smaller office properties.

Gross (Full Service, FLSV)
Tenant pays a base rent which includes all expenses.  Landlord is paying for all building operating expenses including janitorial service.  Most common in larger, newer office buildings.