Help On How To Read This Lease Please

Business By J1977 Updated 11 May 2011 , 1:08am by johnson6ofus

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J1977 Posted 10 May 2011 , 4:06pm
post #1 of 5

Asking base rent is $23psf
2011 NNN est. $4.50

Multiplying 2000sf at $23 = yearly rent correct?
What does the est. $4.50 stand for?

I know there is a lot more to it but this will help initially.

4 replies
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cakegirl1973 Posted 10 May 2011 , 4:33pm
post #2 of 5

It is possible that the amount that you have calculated as the annual rent could be the amount due each month. Hard to tell with the info you've provided.

The abbreviation "NNN" means that it is a triple net lease, where you, as the lessee would be responsible for the real estate taxes, property insurance, and maintenance.

I suggest you take this lease to a lawyer for them to review and explain to you.

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rcsen Posted 10 May 2011 , 5:20pm
post #3 of 5

Yes, I agree with cakegirl - bring it to a lawyer to review the terms.

Yes, the NNN means triple net - it includes property taxes, insurance, maintenance and sometimes others things such as common areas costs and property management. It's a good idea to find out exactly what is included, especially in regards to the maintenance. Is the tenant responsible for roof repairs, HVAC maintenance, etc?

The triple net charges can vary on a year to year basis, that is why they are estimated (property taxes and maintenance can vary every year). They are charged per foot, just like your base rent.

Total Yearly rent
= (PSF + NNN) x square feet

So your total yearly rent would be
= ($23.00 + $4.50) x 2000
= $55,000.00

Divide that by 12 to get your monthly rent
= $55,000 / 12
= $4,583.33

Oh, and where I am, we have taxes on top of that too. icon_smile.gif

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J1977 Posted 10 May 2011 , 7:47pm
post #4 of 5

Thanks ladies. I haven't written a business plan yet but am taking a score class in the next few weeks. I have been looking at my area for available locations and that was probably the highest i found but also the most desirable in terms of "eye traffic".

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johnson6ofus Posted 11 May 2011 , 1:08am
post #5 of 5

Ditto to all that was said, and when making a $55K "investment" have GOOD people behind you o be sure you understand 100% of what you sign- "estimates" and "worst possible scenario" options as well.

Good luck! Sounds like you are on the right track..... thumbs_up.gif

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