Why a "GROSS" Lease is a Beautiful Thing

January 29, 2021

For people outside of the commercial real estate world, a ‘Gross Lease’ sounds like something that must be, well, gross - like brushing your teeth right after drinking orange juice or finding last Easter’s colored eggs decomposing in the yard on a hot summer day. But the truth of the matter is quite opposite: a gross lease is truly a beautiful thing and at NW Flex Space, we’re proud to provide gross leases for all of our tenants.

 

To understand the benefits of a gross lease, it’s important to know the alternative. The majority of commercial leases are some form of a Net Lease. With a Net Lease there is a starting monthly rent amount, then the tenant is responsible for some or all of the property costs on top of that, which can become an unknown variable expense. This may include utilities, insurance, maintenance, and property taxes. 


 
 
There are three types of net leases. With a single net lease, the tenant pays rent plus property taxes. The double net lease includes rent, property tax, and insurance. Then there is the triple net lease that includes the triple whammy of rent plus property tax, insurance, and maintenance. There can be variable expenses in these leases that are hard to plan for. For example, if you are responsible for maintenance and the HVAC unit goes out, you may be facing a hefty bill to replace the infrastructure on a building that you don’t own.
 
And the charges may not stop there. In many commercial leases, tenants are also charged for Common Area Maintenance, known as ‘CAM’ for short. CAM’s covers the cost of upkeep and work performed on the areas utilized by all the tenants, such as hallways, sidewalks, parking lot, elevators, etc. This charge is determined as a percentage of the tenant’s space vs. the total rentable square footage of the property.




In a gross lease, there are no surprises. Each tenant agrees to a set monthly rent amount that doesn’t change, which is a wonderful thing for staying on budget. One monthly payment will cover your rent plus reasonable usage of your electricity, gas, water, trash and WiFi. 

 

At NW Flex Space, we go beyond the basics and include other items in your gross lease, including access to a commercial-grade copier/printer, conference room, staff kitchen, security system, and a shared forklift for those heavy loads.

 

If you are seeking a new space for your business, the best advice is to go into the transaction with your eyes wide open. Ask a lot of questions, read the fine print, and seek advice from wise consultants. At the end of the negotiations we think you’ll agree with us - a Gross Lease is a beautiful thing!


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Discover the Perks Tenants Enjoy at NW Flex Space

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Perhaps the most valuable perk is the community of businesses who work within NW Flex Space. Working together, we can support each other in business growth. Discover all the perks that NW Flex Space has to offer your business. Contact us to take a tour today!
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