What are the comps in the building and neighborhood? How long has the space been sitting vacant? There are several different ways to determine and negotiate a fair base rent.
All landlords will offer a rent abatement. We understand how much to ask for to help mitigate the effects of potential double rent and construction downtime and to help lower your net effective rent.
Sublease and Assignment
This is a critical and lengthy clause in your lease that provides flexibility should you consolidate, expand or merge. We will negotiate this provision as hard as we would the base rent.
Your rent can increase based on actual expenses of operating the building, CPI or fixed annual increases. The operating expense can easily equate to 5% – 15% of your total obligation. We structure the deal to keep it as low as possible.
Who is responsible for maintaining the HVAC unit throughout the lease? Are there overtime costs after 6pm? These costs rack up and can be a huge headache if not addressed and negotiated well.
Landlords have a “rubber ruler” and can quote any measurement they want on a space. Make sure that they are using a market loss factor or else you are paying on square footage that you shouldn’t be.
Landlords love electricity because they can make big bucks off you. Some landlords will charge a 15% markup on your electricity and not provide you with enough power that you require; let’s make sure this doesn’t happen.
You want your company to grow, right? That’s going to be tough if we lock into a long-term lease without any expansion options. ROFO’s, ROFR’s, Termination Options and Put options are all ways to help you expand.
You invested a lot in construction and employees/clients love your space, but the landlord has decided he wants to lease to someone else at the expiration. Don’t let this occur. Negotiate a favorable renewal clause and secure your long-term future.
Real Estate Taxes
Taxes typically go up and you are responsible for the proportionate share of increases. We negotiate to have the right base year (and more) so that your tax responsibility is as low as possible.
Tenant Improvement Allowance (“TIA”)
As an incentive to sign a lease, a Landlord will typically provide a TIA. The amount can vary greatly depending on the condition of the space, what’s market and the structure of the deal. Know what amount is fair and if the Landlord is willing to take on the construction themselves.
Base Building Work
A landlord may provide a TIA or build to a cap, however, this allowance should be provided after Landlord’s pays and/or completes base building work. HVAC, bathrooms, floor work and much more goes into base building work and can be a huge cost savings if negotiated properly.