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  • Writer's pictureRenee Ervanian

Fine Lines and Missing Pieces in the CRE lease.

Focusing on the details of the CRE lease can create a better real estate experience.

Utilizing cost saving lease tips can secure maximum value for your organization. There are many, and a few are itemized below.

*BASE YEAR. If a lease is being executed in the last quarter of the year, request the base year be pushed to the upcoming year. Include an annual cap on controllable expenses and increase the building occupancy to 95+ percent. Retain the right to review annual, itemized budget overages. There may be an error in base year comparison cost, especially if the building changed ownership and past expenses were not disclosed.

*SECURITY DEPOSIT. When renewing a lease at a higher rental rate, confirm the security deposit will remain the same without increase. Otherwise, you may be surprised when you receive your monthly invoice requesting an additional deposit.

*AFTER HOURS AIR. If the lease is full service but employees may work an evening or

weekend, request free after hours usage of air "within reason". Although a tenant can typically access their suite 24/7, there may be an after hours charge for use of the air condition/heating system.

*LANDLORD'S RIGHT TO RELOCATE. Request deletion of the Landlord's Right to Relocate. Although the Landlord may pay for the relocation, reimbursable cost may not include the value of your time and effort involved in moving to a different suite, often due to a neighbor expanding or a larger, full floor tenant forcing you out. You may not prefer the floor plan and views of the new location to your original suite.

*RENEWAL OPTION. Although an Option to Renew may be years away, it could be valuable if vacancy rates are low and a neighboring tenant needs to expand. You may be forced into relocation at lease expiration even if you do not want to move.

*SUBLEASE. If an unexpected issue arises, and you need to sublease, the Landlord typically agrees to Consent To Sublease which cannot be unreasonably withheld. If a sublease tenant is secured, you may want to include a time frame for the Landlord response, such as five (5) business days, so the potential sublease tenant does not get tired of waiting and move on.

*COMPETITION. Create a SENSE OF COMPETITION for your tenancy! When working with a tenant rep broker, Landlord's know you are well informed, aware of the best market options and may have more than one proposal submitted at the same time.

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