What percent should a landlord ask from the tenant on NNN (taxes, insurance and maintenance).

I now owned a commercial building (Mix Use). 1 Residential (uppr) and 2 retails (lower). What percentage How much should I ask the 2 retail tenants to cover in bills (Maintenance, tax and insurance)... Should this be separate from the Primary rent itself
In Leasing Property - Asked by Jon G. - Sep 16, 2013
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Answer(s)

arik r.
Broker/Agent
Henderson, NV

you should charge them the share from the total expense base on use or precent (in sqft) of the total
if your lease say they need to pay the cam charges

Sep 16, 2013
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Michael S.
Broker/Agent
Newport News, VA

Typically your tenants pay a percentage based upon the amount of space they are leasing, and your lease should reflect this. If a tenant occupies 1 of 4 equal units in the bulding and it is 10,000 square feet, then they would pay 25% of the total NNN charges for the building 2500/10000 = 25%.
Whether or not these charges should be built into a base rental number or separated out is a matter of marketing and preference. if they are separately charged, you can typically adjust them more frequently to respond to unusual circumstances, i.e. you don't have snow for 5 years, then have a heavy snow one year and have to de-ice, sweep your parking areas, etc If your maintenance cost goes up that year, and the charges are not separated, you have no way to collect the added expense from your tenants.
With the internet, and the ability to price shop in a second, if your asking rents are not comparable to your competitors, you may not get a second chance at a good tenant. If all of the competition is marketing the space at $10 per square foot but the operating expense charges are extra, and you are marketing at $14 per square foot, with the charges included in your base rent, you may never see some of those leads.
Hope this helps.

Sep 17, 2013
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Marsim P.
Property/Asset Manager
Owings Mills, MD

In most cases the tenant is charged base on the square footage of the space that they are leasing, some property manager may even charge a slightly different fee if you have a much more visibly location than a person who may be in the rear, In a mix use this situation, you could charge a lesser fee for the residential and more for the commercial, since the commercial is a business.

Sep 22, 2013
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Varujan A.
Broker/Agent
Watertown, MA

The NNN Charges typically are based on the leased square footage to the tenant.
Example; Entire building area 10,000sq' and tenant 1 has 5000sq' then the NNN charges to tenant 1 are 50% of overall costs for insurance , taxes and common area maintenance.If the

Sep 30, 2013
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