Watch the Uncommon Price for Common Space

Watch the Uncommon Price for Common Space

When you lease an industrial building or a strip center, what you see is what you get. Watch out for the costs within a large office space. Each tenant pays a percentage of upkeep in the common area.

You already pay for the space within your suite including a lobby, storage and working areas. But added costs mount up.  You will pay a percentage for elevator shafts, bathrooms, atriums hallways, janitorial closets and HVAC rooms.  The rentable charge includes a factor for useable add-on space. 

Building Owners and Managers Association International (BOMA) has come up with a standard on how this space should be measured but not every landlord adheres to that measurement standard.

 In the Detroit area, Compass Commercial usually factors 12 percent  However last year while in Los Angeles, our firm looked at a building that had a 25 percent cost factor.  It had a small atrium along with a conference room that tenants could lease for a nominal fee.  I asked the broker to please define common space. He said take it or leave it. We left!

Recently I learned that many buildings in Long Island bear a 20 percent factor for use of common space. It bears review. Beware of rental rates that look very alluring on paper. It could be the price of a suite, not including markups for common space.

Ask yourself how much you want to pay to maintain real trees in the atrium, a giant perennial garden outside and multiple banks of elevators. Something simple may suit your suite needs. Or the wow factor may be worth the price. Just think before you are mesmerized by what dazzles and ask if it delivers satisfaction on a monthly basis.

About the Author

Lynn Drake’s status is well known in the industry: She’s the commercial realtor focused on maintaining “true north” for her corporate clients. It’s a reputation built on 35 years of commercial real estate experience. Lynn became a commercial realtor in 2001 after 15 years in corporate real estate. Thus far in her career, Lynn has successfully completed over 1,500 real estate transactions ranging from small business tenant leases to the sale and purchase of industrial complexes.