Commercial Leasing Industry Terms You Should Know

Commercial Leasing Industry Terms You Should Know

Can you believe that the commercial leasing industry in the United States is valued at over $220 billion?

Simply put, there’s plenty of money to be made within this industry. Before you dive headfirst into profits, it’s worth learning about common terms. That way, you can always make informed decisions and know what to expect.

Even if you’re already working within this industry, it helps to brush up on everything. Keep reading to learn the commercial leasing industry terms that are essential.

Gross Lease and Net Lease

When it comes to commercial property management, it’s essential to know that a gross lease means the landlord is responsible for most of the costs associated with their property. In some cases, you could even be responsible for everything.

A net lease is sometimes called an N lease and defers some operational costs onto the tenants. For instance, they may pay maintenance fees, property taxes, and even insurance premiums in addition to the actual rent.

Single-Tenant and Multi-Tenant Net Lease

There are many leasing variations, such as single-tenant and multi-tenant net leases. If you’re a beginner in the world of real estate, then you can get a feel for things by starting with a basic single-tenant net lease. As the name suggests, it is a property that houses one tenant or family.

A multi-tenant net lease can involve two tenants or many more than that. The benefit of a multi-tenant net lease is that it reduces the chance of inoccupancy. This gives you a greater sense of financial security.

Single, Double, and Triple Net Leases

Since there are plenty of variations in the leasing industry, it’s worth familiarizing yourself with as many as possible. Although it’s not as common, single net leases can come in handy in certain situations. It refers to a tenant who pays a base rent plus all related property taxes.

A double net lease involves the same financial responsibilities above but with the added responsibility of insurance premiums. You may have heard a single or double net lease referred to as a semi-gross lease.

Aside from those, the triple net lease has the tenant paying for just about everything, including the base rent, insurance premiums, property taxes, and maintenance costs. This kind of lease is often used by tenants who want to use or rent out an entire apartment complex, for instance, or another commercial building.

Ready to Succeed at Commercial Leasing?

Now that you’ve learned some essential commercial leasing industry terms, you can start making more informed decisions. You’ll generate even more revenue as you become familiar with these terms and others.

SWFL Commercial Group is dedicated to combining the property management mindset with entrepreneurial ambitions. You can always count on our highly-rated expertise, from acquisition and disposition to commercial leasing services and property management.

Feel free to contact us at a time that suits your schedule. We look forward to working with you.