Revenue Methods Multi family
March 21, 2025
Risk Return Chart – Multifamily
April 4, 2025Lease cost terms
Types of commercial real estate agreements, each with distinct cost structures and responsibilities.
Understanding these cost components and lease structures is essential for businesses to budget effectively and negotiate favorable terms in commercial real estate leasing.
| Expense Category | Triple Net (NNN) | Full Service | Modified Gross |
|---|---|---|---|
| Base Rent | Tenant pays | Tenant pays | Tenant pays |
| Property Taxes | Tenant pays | Landlord pays | Landlord pays |
| Insurance | Tenant pays | Landlord pays | Landlord pays |
| Common Area Maintenance (CAM) | Tenant pays | Landlord pays | Varies* |
| Utilities | Tenant pays | Landlord pays | Tenant pays |
| Janitorial Services | Tenant pays | Landlord pays | Varies* |
| Interior Maintenance | Tenant pays | Landlord pays | Tenant pays |
| Exterior Maintenance | Tenant pays | Landlord pays | Landlord pays |
| Risk | Higher for tenant | Lower for tenant | Shared |
| Typical Use | Retail, Industrial | Office | Office, Industrial |
*In Modified Gross leases, the allocation of CAM and janitorial expenses can vary based on negotiation between landlord and tenant.
Lease rental amounts
Commercial real estate leasing involves various costs that tenants must carefully evaluate. These costs are typically quoted on a per square foot per year basis and depend on the lease type, property location, and market conditions.
Some of the other terms include anchor clauses, rent abatements, shadow claues, use claues and much more
