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Massachusetts ” Full Service” Commercial and Residential Real Estate Brokerage

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Commercial Leases

September 16, 2008

Types of Commercial Real Estate Leases


 

A wide range of commercial leasing possibilities exist. Typically, an office lease in a major city and a retail lease in a suburban shopping center will be considerably different.

From a broad perspective, there are a few types of leases commonly found. Within these categories, leases may vary considerably.

 

  • Gross lease: The tenant pays a set amount of rent and the landlord is responsible for payment of taxes, insurance and other costs associated with owning the property.
  • Net lease: The tenant pays the rent plus a portion of the maintenance fees, insurance premiums and other operating expenses.
  • Triple-net lease: Typically, for a freestanding facility, this type of lease has the tenant paying for all fees and operating expenses associated with the space.
  • Shopping center leases: The tenant pays a base rate in conjunction with the square footage of the retail facility. Typically, the tenant will also pay some common charges and frequently a certain percentage of the gross sales. The tenant may also be assessed part of the property taxes. A shopping mall lease will often include terms about signage, hours of operations, common areas and deliveries. The landlord may also have the right to relocate the tenant.
  • Land or ground lease: The tenant leases the grounds and builds on the property. Typically, with a land or ground lease, all improvements on the property, including any building or buildings revert back to the landowner at the end of the lease period.
  • There are numerous variations on common lease forms. For example a lease may cover both office and warehouse space in one facility with separate rental amounts and separate options.