Negotiating Commercial Leases – Part 3 – Hidden & Unnecessary Costs

Last week, Marcus & Boxerman posted the second installment of a four-part series on clauses to watch out for in commercial leases. This installment discusses making sure you get what you pay for by avoiding hidden and unnecessary costs in your next commercial lease.

Many tenants pay more than they bargained for because of costs associated with poorly measured rental spaces and inappropriate items landlords insert as common area maintenance or administrative costs and fees. Take a close look these clauses in your next lease to ensure that you aren’t losing money over time.

commercial leases, phantom space, commercial real estateSquare Footage.
Only pay for the space you get. Commercial tenants often overpay for their spaces because of the inaccurate measuring of the premises. “Phantom space,” the extra space listed on lease agreements that does not actually exist, costs you extra money in base rent and CAM, and quickly adds up over a 10-year term. Before you sign, ensure you’re getting what you pay for by measuring the space and recalculating the rent.

Common Area Maintenance (CAM). Don’t let your landlord pass the buck to you with inappropriate common area maintenance (CAM) costs. Certain CAM costs make sense for tenants, but your landlord’s capital expenditures and tacked-on administrative fees may cause greater costs than you should bear. Try to get a cap to CAM costs, increases, and reasonable administrative fees that are tied to the services your landlord provides.

Cut unnecessary and hidden costs out of your commercial leases by contacting us at (312) 216-2720 or to speak to one of our experienced attorneys today.

This entry was posted in Franchisee, Franchisor, Leases, Real Estate and tagged , , , . Bookmark the permalink.