Types of Leases for Your Office Space
When renting a commercial space, the type of lease that you sign with the landlord is a crucial element for your business success. If you’re not careful, this small but essential detail can end up backfiring.
Despite being one of the most populated cities in the US and one of the hardest-hit during the recession, the Los Angeles economy remains resilient. It also continues to draw in investors looking for office space for rent Los Angeles due to a host of reasons, including the sunny weather and California lifestyle.
The unemployment rate continues to dip to a projected 3.7 percent by the end of 2019 and 3.4 percent next year. Also this year, the local economy will generate 322,700 jobs and another 318,500 in 2020. This shows that businesses are optimistic about the local economy and are investing their money to help it grow.
If this is your first time venturing out in the City of Angels and you are looking for office space, here are some types of commercial leases:
- Percentage Lease – This is a lease type where you pay a base rent charge in addition to a satisfying percent of your monthly sales income. In this case, you pay a smaller rent because the landlord is banking on your revenue potential. You will have to negotiate with the landlord to determine the “breakpoint,” which is the gross income when the percentage share kicks in. A lower rent means a lower breakpoint.
- Double Net Lease – In this type of arrangement for an office space for rent in Los Angeles, the landlord will assume the cost of the premium insurance, as well as the property taxes. Also, the landlord will shoulder the maintenance costs. To recoup the money, the landlord will collect from you the additional payments on top of your monthly base rent.
- Single Net Lease – In contrast, with the Single Net Lease, the costs of the premium for the insurance, property taxes, and maintenance expenses will be passed on to the tenant.
- Triple Net Lease – A Triple Net Lease is another variation of the Net lease. Under the arrangement, both the landlord and the tenant share the expenses that come with the property, including insurance, maintenance expenses, and real property taxes. The rent is typically lower in a Triple Net Lease compared to the Double Net Lease.
- Full-Service Lease – Just as the name suggests, a landlord will assume the cost not just of maintenance, property taxes, and building insurance. He will also take care of other associated costs. These include utility, janitorial services, and others. This results in a higher rental fee through the load factor, which means that you will eventually take on these costs
If you’re looking for an office space for lease in Los Angeles but don’t know where to start, visit Office Finder. The website aims to make your search easier. You write your wish list, and the site will connect you with the right realtor to cross off the requirements on your list.