Leasing 101 - Part 5

5) Rates: Never what they seem

• Net vs. Gross vs. Modified Gross Rates: What’s the difference and why does it matter?
• What does the rate include? Taxes? Insurance? Operarting Expenses? Etc.?
• What doesn’t the rate include? Taxe? Insurance? Opearting Expenses? Etc.?
• Are there annual bumps in the rate? If so, are they at, above, or below market?
• What is the rate on any option included in the lease? Has it been pre-neogiated or is it to be determined at the time the option is exercised?
• What is the rate on holdover rent?

Far too often, tenants get caught up in comparing price per square foot withotu considering if they are comparing apples-to-apples or apples-to-organges.

The first question to ask after a rate is quoted is "What's included or not included in that number?"