What are the 3 Main Types of Office Space Leases?

Important Things to Remember About of Office Leases

If you are a first-time lessee (tenant), you should understand the different types of leases available and associated terms and conditions with them. 

• Lease term: The specific number of months when the lease will be valid. It should have a beginning date and an ending date.

• Base rent: Calculated as price per square foot or a fixed monthly fee

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• Escalations: The landlord will increase the base rent (usually annually) and as a percentage of the base rent.

• Common area expense: It is also known as common area maintenance (CAM). This is the tenant’s share for shared areas such as parking, cafeterias, lobby, pantries, gymnasiums, mail room, recreational rooms, auditoriums and public bathrooms.

• Sublease and termination clauses: This allows the lessee to rent out the property to their associates fully or partially or vacate the premises before the lease term is complete after giving proper notice.

• Renewal or extension clause: This clause gives the lessee the first right to seek an extension on the lease term before the landlord approaches any other party.

• Expansion and relocation clauses: If additional space in the office building becomes vacant and any existing lessee wants to take up that extra space, they should get first preference. Also, the lessee will get to negotiate the new space at a better rate than current market rate by virtue of being an old tenant. 

The relocation clause is seldom exercised by the landlords, however there is a provision in the lease agreement for them to relocate the tenant to another location (owned by the same landlord) at their own expense if there is maintenance work going on in the current building/ the landlord is selling the building. 

3 Main Types of Office Space Leases

•    Gross Lease

This type of lease is also known as a full-service lease and the lessee pays a fixed amount per month for the areas mentioned in the lease agreement. The lessor or landlord pays for all the services here including building maintenance, common area maintenance, utilities, taxes and insurance. Most of the co-working spaces function using a gross lease. 

•    Modified Gross Lease

When the lessee or tenant pays for some of the services too, along with the fixed monthly rent, the gross lease becomes ‘modified’ gross lease. Some of the extra services that the lessor or landlord might bill the lessee could be for janitorial services, utility bills (Electricity and water), etc.

•    Net Lease

Tenants with a net lease will have to pay a fixed amount each month as the base rent. Then, depending on the type of net lease, on a pro-rata basis they will have to pay other monthly fees which will include property tax, building insurance, and common area maintenance.

• Single Net Lease- base rent + property taxes

• Double Net Lease- base rent + property taxes + building insurance

• Triple Net Lease- base rent + property taxes + building insurance + common area maintenance

Brigade Group for Office Space Lease in Bangalore 

The following properties are available for lease in Bangalore-

1. WTC Kochi

2. WTC Chennai

3. Brigade Magnum

4. Brigade Senate 1 and 2 (Hebbal)

5. Brigade Tech Garden

Conclusion

Apart from Bangalore, you can even check out office space for lease in Chennai, Ahmedabad, Gandhinagar, Kochi and Mysuru. There are multiple world-class office space buildings created and maintained by Brigade Group and if you take your office space for lease in any of these facilities, you will make a great investment. Your employees will be happy to work in such amenity-filled office spaces and your clients will have faith in the vision and credibility of your company. 

Article source: https://article-realm.com/article/Finance/20059-What-are-the-3-Main-Types-of-Office-Space-Leases.html