What is Your Rent Really?
Industrial rental rates can be deceiving
and difficult for the layperson to understand. It is because
of this we must be sure to get clarification on how landlords
Your industrial occupancy costs are primarily
made up of four (4) components:
- Base rent quoted on a per square
foot per year basis (psf/yr)
- Proportionate share of property
- Proportionate share of property insurance
on the building (psf/yr)
- Proportionate share of Common
Area Maintenance (CAM) (psf/yr)
Different landlords quote their rent differently
and the difference can represent up to 30% of the overall
occupancy costs for a given location. The following shows
the differences in quotes and how they differ:
This quote is the most accurate basis for
comparing the cost to occupy any given industrial property.
This quoted rental rate will include Base Rent, Property
Taxes, Insurance, and CAM. Quoted on a per square foot
basis per year, this will render the most complete
analysis of cost to occupy.
Triple Net (NNN)
quote will only include the Base Rent per square
foot per year. If quoted this way, we must determine how
much additional expenses are related to Taxes Insurance
and Cam per square foot per year so that we can compare
apples to apples between different options. These costs
can account for up to 30% of your occupancy expense.
There are some other derivatives
for quoting rent, however, these are the two most common.
As you can see, it is critical to understand how rental
rates are quoted, and to make sure that we are not missing
any material components necessary for determining the best
facility for your company.