Austin Office Space for lease and sublease , understanding operating costs and expenses.
Office space for lease and sublease have operating costs involved which you will see quoted on your lease as triple net ,modified gross or full service expenses. When you negotiate on an office space for lease or sublease you will want to make sure that you understand all of the costs involved.
Lets start with routine operating costs for an office space for lease or sublease, within the operating costs are routine maintenance expenses such as:
- Property management fees paid
- Cost of the utilities to include water, electric and janitorial costs
- Common area maintenance costs such as landscaping, parking lot, common area restrooms
- Garbage removal services
- Supplies and equipment for an office space for lease or sublease
- Advertising expenses for the office space for lease or sublease incurred by the landlord
Operating costs are analyzed over a yearly cost of operation for an office space for lease or sublease, if you have entered into an office sublease then you should have exactly the same operating expenses as the current tenant subleasing the space to you. You will want to make sure that your commercial real estate broker provides you some coaching and consultation regarding reasonable expenses for any office space for lease or sublease.
Property managers or landlords are looking to project realistic operating expenses for an office space for lease or sublease for a specific property. Also an important piece of the puzzle is the operating expense increase year to year for an office space for lease or sublease. The operating expenses for an office is going to be most likely different from a warehouse space for lease or sublease. Therefore, you should expect some guidance from your commercial real estate broker on what is a reasonable increase per year for operating expenses.
Operating expense increases for office space for lease or sublease depends on several factors such as vacancy rates, the current market conditions, or if it is a sublease what is the current tenant willing to do for you? Sometimes with an office space for lease or sublease you can get a better negotiated rate to water down the operating expenses. Expect the operating expenses to be a whole number rather than a percentage when you are dealing with an office space for lease or sublease.
When you locate an office space for lease or sublease, you can also expect the landlord to transfer any tax increases to you as the tenant. Most leases use terminology called base year expenses which essentially means your expenses are locked in for the first year of your office space for lease or sublease. After the first year, if property taxes move upward , you should expect an increase in the expenses as well for your office space. You broker can make sure that you are not being charged more than your proportionate share of the expenses.
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