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Looking to rent office or retail space? Be sure to understand what you are
ultimately going to pay in rent. Not all quoted rental rates are the same. Take the example using two
quoted rates, $8/sq.ft. and $10/sq.ft. The $8/sq.ft. rate is the lower rent, correct? Not necessarily.
In this example, let's say the $8/sq.ft. rate is a "triple net" lease and the $10/sq.ft. is "plus
utilities". Under a "triple net" lease, the tenant pays a pro rata share of real estate taxes, insurance
and common area charges which could add another $3-$5/sq.ft. in expenses. Hence, the $8/sq.ft. rate is really $11-$13/sq.ft.
and the tenant would still have to pay their own utilities on top of this rate. In the above example, the $10/sq.ft.
rate is actually the lower rate because it includes all those expenses that the "triple net" rate does not.
At The Place in Victor Village, our quoted rental rates are all
inclusive with the exception of electric for lights & power and janitorial (i.e. cleaning) within the tenant's space
only. If you are quoted a lower rate for another property, always ask "what expenses do I pay above the base
rental?". After adding these expenses to the rent, only then should you directly compare the rates. Our
rates will tend to be lower than most of our competitors because we agressively manage our expenses in order to provide the
most competitive rates to you.
Other factors affecting what you will pay in rent are your length of lease
term, the extent of tenant improvements to be financed by the landlord and how the leasable area of your space is
calculated. You should by familiar with two terms, Usable Area and Rentable Area. Usable Area is defined
as the area that your business actually occupies as measured from wall to wall. Rentable Area is the area that your
rent payment is based upon. Rentable Area will be higher than Usable Area when a Common Area Load Factor is
applied. This Common Area Load Factor is used in multiple tenant buildings where there is common area space to account
for the landlord's expense of maintaining this space. Common area space typically includes elevators, hallways,
common bathrooms, etc. which are commonly used by all tenants. Hence, by appling a Load Factor, the expense of
maintaining this space is spread-out equally among all the tenants. At The Place in Victor Village, we quote
our available square footage in terms of the Rentable Area.
Another important consideration in comparing space
is the extent of finish provided by the landlord. At The Place in Victor Village, we provide a finished ceiling,
finished perimeter walls and carpet floors for a minimum 3-year lease term. For a 5-year lease term, we may also
consider other improvements such as interior walls, plumbing, etc. Be sure to ask and compare the finishes included
with the base rent.
If you have any questions regarding the above, we will be happy to answer them.
All you have to do is contact us. Thank you for considering The Place in Victor Village.
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