Commercial Retail/Office strip Charging NNN and Add-on Factor?

I am negotiating a commercial lease for a client of mine and i can wrap my head around the fact that the landlord wants to charge NNN on a space where he already has added the "Add-on Factor" for the useable square footage.
To me, it sounds like they should either do Useable + NNN or just rentable. Am i wrong about this?
In Leasing Property - Asked by Crestico R. - Mar 2, 2014
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Answer(s)

Jeff A.
Broker/Agent
Newport Beach, CA

When you say the "add-on factor", I am assuming you mean "load factor", correct. Is this an office lease or retail lease? It sounds like an office lease and most Landlords will calculate the NNN's based on the rentable square footage, which will include the load factor vs. useable square footage.
Does that answer your question?

Mar 3, 2014
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Richard Lee A.
Broker/Agent
West Palm Beach, FL

Here in Florida we call it a gross lease which includes cam and nnn or we do a net lease plus cam or nnn .Agents use the net lease because most people dont know what it means so the price looks lower when its really higher. A net lease will look like $12.00 sf then somewhere on the page it will say nnn or cam which does not say price,but the cam may be $6.00 which really now makes it 18.00sf ,a gross lease will just say $18.00sf which now looks like its more money but really its the same nnn and cam is a hidden charge because the adds says nnn or cam not the price ,its aleader for people to call because the price looks lower. The truth is Ive closed more deals because I do adds at gross amount becuase this way people dont get a suprise they want to know the real deal and not after they drive there. My Name Is Richard Lee Armstrong And Im Top Agent Nationwide

Mar 7, 2014
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Steve C.
Broker/Agent
Frederick, MD

This sounds like the Landlord is adjusting for the core/load of the building. I have seen it presented a few times and its always caused problems. Most LL now use a formula that includes the core within the base rent of the space. I would recommend you try to negotiate a full-services or gross lease where the tenant has one charge per month (outside of their contracted services – phone, internet, etc.) It will be a larger number but it saves the tenant from getting the annual ‘adjustments’ for CAM, taxes, etc.

Mar 10, 2014
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