KW Commercial New Hampshire & Massachusetts

KW Commercial New Hampshire & Massachusetts

< BACK TO POSTS

When leasing a space one of the most confusing matters is what am I paying for in my lease fee that the landlord gets monthly? If you are renting or leasing a space in a multi-tenant building then I hope this may help you understand the lease payment and how it is comprised. I will use an example for this explanation. Suppose the building you are in is 10,000 Square Foot (SF) and you are leasing 2,000 SF. Of the 10,000 SF there is a common area, such as small entry way and common bathrooms and hall ways. The total common area is 1,700 SF, so the Common Area Factor or CAF is 17% of the total building. In this example your useable SF area is 2,000 and your rentable SF is 2,000 + 17% or 2,340 SF. In essence even though you only use and occupy the 2,000 SF rentable area, your lease payment includes your percentage of the common area. The reason being is that the landlord has an expense to operate the complete building including the common area. Since all tenants in the building use this common area, they all participate in paying their pro-rata share of the landlord’s expense. Take heart though, in most cases, any vacant space becomes the landlord’s responsibility to pay for, which also includes that vacant space’s CAF. So the next time you pull out and look at your lease, the lease fee you pay, is typically based upon rentable SF. I hope this helps you to have a better understanding of leasing and understanding the difference between rentable verses useable square feet. Image result for square feet

Tags: common area, common area factor, useable SF, rentable SF, CAF, lease fee, rent fee, lease a space    

Posted: 4-09-2016 10:27AM EDT