Commercial leasing involves vacant
lands, office, retail and industrial properties. Many people are
involved in the leasing process: tenant, real estate agents, landlord,
lawyers, accountants, engineer, architect, contractor, lease
administrator and more.
As a leasing agent, you may have
to deal with all of these people to get the result. You need to
know the terminologies and the jargons in the field.
For vacant lands, the leasing
process often involves build to suit option. A build to suit is a
landowner offers to pay the construction cost of a building specified by
the tenant, and then to lease land and building to that tenant.
Another case is to just rent the land to the tenant (a long term, say 60
years); the tenant will then build their own property accordingly or to
use the land without building anything on it, such as use it as a
parking lot.
For office leasing, tenants may
want to rent space in office building with different classes. Office
building classifications in most markets refer to Class "A", "B", "C"
and sometimes "D" properties. The rating assigned to a particular
building is very subjective and the class of a building may vary
depending on the location of the property.
Class A office buildings are normally characterized as buildings that
have excellent location and access; excellent facilities including high
speed internet cable, elevators, underground parking space and mini
stores on the ground floor; they attract high quality tenants and are
managed professionally. On the contrary, Class D office buildings
just provide the basic needs for office use.
For retail leasing, it is similar
to office leasing. Instead of class A, B, C and D buildings; the
options are main street stores, strip plazas, big box stores (big
plazas) and regional malls. In retail leasing, some tenants
may have to pay percentage rent (a percentage on their gross sales) in
addition to the base rent (per square foot). Retail tenants may
have to pay percentage rent and usually their additional rent is the
highest since most of them have to cover bigger common area.
Industrial leasing involves
technical knowledge such as the power supply, floor loading, fire safety
and environmental issues. Industrial buildings may provide many
uses, such as warehouse, light industrial, food processing and heavy
industrial. The net rent is the lowest compared to retail and office
space, as industrial units are normally much bigger than the other two
types.
