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Austin office lease costs

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Real Estate Broker/Owner with Steve Shire- CRE Broker | Austin, Texas 0524917

Austin office lease costs


Alot of potential tenants and existing tenants often have the question of "What is the total cost for me per month to lease an office in the Austin area"? Office leasing costs are broken down into several areas , therefore let's go through them so you know what you are getting into with an office lease.

For starters, you are going to be looking at a base lease rate for an office or what is called the base rate for an office lease.  Base lease costs for an office are represented usually in a price per square foot per year versus a price per square foot per month. As an example a Class A office lease cost may come in at $26.00 per square foot , this is a per year rate.  To figure out your monthly rate just divide the office lease cost by 12 and you will get your monthly lease rate. In this example the monthly lease cost for an office is $2.17 per square foot per month.Austin office space

If you are looking at a 2500 square foot office space, then your monthly office lease cost would be $5,425.00 per month. This number may or may not include your expenses. Base office lease costs are for the base year meaning the first year and expect incremental increases each year thereafter for the remaining years of your lease term.

Expenses : Expenses are classified into several categories, keep in mind these costs are added into the rate or added onto the base rate. The first type of expenses you may hear about are called NNN expenses these are expenses that are comprised of property taxes, property insurance and common area maintenance costs. There is also something called an add-on factor which comes into play if the restrooms are common rather than private and there may be an additional percentage that is charged onto the base lease cost of the office space.

Modified Gross office lease costs are defined as a base lease rate that includes the NNN expenses for the first year which is how it is quoted. An example would be $26.00 modified gross, that means you will pay for the electric and janitorial costs of the office space.

Full service is defined as an all in rate , an all inclusive $26.00 base lease means your property taxes, property insurance , janitorial and electrical is included in the office lease costs. Always keep in mind that your office lease costs will increase each year after your first year is completed.

Other costs- office lease costs also have additional costs that are separate from the expenses and lease rates. You will always be required to carry anywhere from a one million dollar to two million dollar liability policy to insure your property and name the landlord as an additionally insured on the policy.  Electricity is also another office lease cost that you will incur unless you have a full service lease in place for an office. Security alarm systems are also another consideration as an additional office leasing cost that you may incur.

Wikipedia: Office Space is a 1999 American comedy film satirizing work life in a typical 1990s software company.

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