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The following post is copyrighted by Austin Tenant Advisors - . When leasing commercial real estate it’s important to understand what is being included in the rental rate and what all you are paying for. Most commercial leases are going to be triple net leases where you pay your pro rata share of operating expenses as well as the base rental rate. In many cases such as when renting commercial real estate in Austin Tx the operating expenses are going to be about half of what your base rental rate is. For example in Northwest Austin class A office space base rates are $30 sf and the operating expenses are estimated at $16 sf. In downtown Austin operating expenses are over $20 sf. As you can see operating expenses are a significant portion of your total rent amount. Below you will learn what operating expenses are, what’s included, and what can be negotiated. Definition of Commercial Property Operating ExpensesThe definition of commercial property operating expenses (OPEX) is the costs associated with maintaining and operating a commercial property such as office space, retail space, and warehouse space. Depending on the building lease structure the operating expenses maybe a component of the gross rent or be in addition to the base rent. Most commercial office leases in Austin are going to be triple net (NNN) leases in which the OPEX are paid by the tenant in addition to the base rent. With multi-tenant buildings each tenant is responsible for their share of opex which depends on the rentable square footage of their space compared to the total rentable square footage of the building. What do Operating Expenses Include?
What is Not Included In Operating Expenses?The short answer is they do not typically include capital expenses, debt service, commercial property marketing costs, leasing commissions, tenant improvement allowances, or capital reserves for future repairs. Is Commercial Real Estate OPEX Negotiable?If you are a larger tenant then landlords may be negotiable on their controllable items such as CAM charges since they can control how the building is managed. For example getting the landlord to agree to capping the annual opex increases. Landlord’s have no control over property tax increases, therefore will not agree to cap those. How to Negotiate an Operating Expense Cap
Examples of Commercial Property Operating ExpensesI pulled the info below from one of the commercial leases I was reviewing. Most have this sort of language in the lease that defines what operating expenses are AND what they are not. Operating Expenses May Include the Following:
Operating Expenses Do Not Include the FollowingIn no event shall Operating Expenses include any of the following (collectively, “Exclusions”):
The post What are Commercial Real Estate Lease Operating Expenses? appeared first on Austin Tenant Advisors. via Blogger What are Commercial Real Estate Lease Operating Expenses? The following post is copyrighted by Austin Tenant Advisors - . When leasing commercial real estate it’s important to understand what is being included in the rental rate and what all you are paying for. Most commercial leases are going to be triple net leases where you pay your pro rata share of operating expenses as well as the base rental rate. In many cases such as when renting commercial real estate in Austin Tx the operating expenses are going to be about half of what your base rental rate is. For example in Northwest Austin class A office space base rates are $30 sf and the operating expenses are estimated at $16 sf. In downtown Austin operating expenses are over $20 sf. As you can see operating expenses are a significant portion of your total rent amount. Below you will learn what operating expenses are, what’s included, and what can be negotiated. What are Commercial Property Operating Expenses?The definition of commercial property operating expenses (OPEX) is the costs associated with maintaining and operating a commercial property such as office space, retail space, and warehouse space. Depending on the building lease structure the operating expenses maybe a component of the gross rent or be in addition to the base rent. Most commercial office leases in Austin are going to be triple net (NNN) leases in which the OPEX are paid by the tenant in addition to the base rent. With multi-tenant buildings each tenant is responsible for their share of opex which depends on the rentable square footage of their space compared to the total rentable square footage of the building. What do Operating Expenses Include?
What is Not Included In Operating Expenses?The short answer is they do not typically include capital expenses, debt service, commercial property marketing costs, leasing commissions, tenant improvement allowances, or capital reserves for future repairs. Is Commercial Real Estate OPEX Negotiable?If you are a larger tenant then landlords may be negotiable on their controllable items such as CAM charges since they can control how the building is managed. For example getting the landlord to agree to capping the annual opex increases. Landlord’s have no control over property tax increases, therefore will not agree to cap those. How to Negotiate an Operating Expense Cap
Examples of Commercial Property Operating ExpensesI pulled the info below from one of the commercial leases I was reviewing. Most have this sort of language in the lease that defines what operating expenses are AND what they are not. Operating Expenses May Include the Following:
Operating Expenses Do Not Include the FollowingIn no event shall Operating Expenses include any of the following (collectively, “Exclusions”):
The post What are Commercial Real Estate Lease Operating Expenses? appeared first on Austin Tenant Advisors. via Tumblr What are Commercial Real Estate Lease Operating Expenses? The following post is copyrighted by Austin Tenant Advisors - . Garza Ranch is a new 34 acre commercial development in Southwest Austin that will include 400,000 sf of office space, a 140 room, five story Aloft boutique hotel, a 370 unit apartment complex and a 2.2 acre park. The new project is located off of South Mopac Expressway in Southwest Austin, really close to William Cannon. Software House International (SHI) has already announced plans to build and move into 1 of the 2 buildings to be built. The remaining 150,000 sf has not been spoken for at this point. Brandywine Realty already has contractors doing the infrastructure work to build roads and utilities to the property that is expected to be completed by the end of 2018. The office buildings are expected to be complete by the 1st quarter of 2020. For more information about office space for rent in Southwest Austin at Garza Ranch give us a call at 512-861-0525 The post Garza Ranch Office Space appeared first on Austin Tenant Advisors. via Blogger Garza Ranch Office Space The following post is copyrighted by Austin Tenant Advisors - . Garza Ranch is a new 34 acre commercial development in Southwest Austin that will include 400,000 sf of office space, a 140 room, five story Aloft boutique hotel, a 370 unit apartment complex and a 2.2 acre park. The new project is located off of South Mopac Expressway in Southwest Austin, really close to William Cannon. Software House International (SHI) has already announced plans to build and move into 1 of the 2 buildings to be built. The remaining 150,000 sf has not been spoken for at this point. Brandywine Realty already has contractors doing the infrastructure work to build roads and utilities to the property that is expected to be completed by the end of 2018. The office buildings are expected to be complete by the 1st quarter of 2020. For more information about office space for rent in Southwest Austin at Garza Ranch give us a call at 512-861-0525 The post Garza Ranch Office Space appeared first on Austin Tenant Advisors. via Tumblr Garza Ranch Office Space The following post is copyrighted by Austin Tenant Advisors - . When looking at the different types of commercial real estate property investors and tenants have different objectives. Investors look at commercial real estate (aka commercial property) as a way to make money by generating profits from land or buildings. The primary ways investors make money with commercial real estate properties are through one or more of the following: appreciation, cash flow, and principal build up by having tenant rents pay down the loan. Many investors are looking hard at investing in Austin Tx commercial real estate. Tenants on the other hand are looking to rent commercial property in prime locations for their businesses. Since there are many different types of commercial property tenants have to thoroughly evaluate their needs to determine which type is best suited for their company. To help below I have listed the different types of commercial real estate. Office SpaceOffice buildings consist of multistory buildings in the suburbs or downtown high rises and skyscrapers with common area lobbies, hallways, and bathrooms. These larger buildings can be up to 300,000 to 500,000 rentable square feet. They also can be single tenant properties, smaller professional office buildings and condos. Short term serviced executive suites and coworking spaces would also fall into this category. Traditional office space are typically classified as A, B, or C. Class A office buildings will be the newest, nicest and most expensive buildings in the best locations, and with the best amenities. Class B offices are nice but typically a little bit older and without all the amenities. Class C buildings are the oldest, less maintained, and least expensive office buildings, and in less desirable locations. Industrial SpaceIndustrial spaces have multiple categories as they are designed to service different types of users. They will range from small Flexible or R&D properties to larger warehouse and distribution centers. Companies that rent industrial space may need a little bit of office space however a large portion of it will be warehouse space used for bulk storage, retail warehousing, manufacturing, distribution, light assembly, etc. They typically equipped with loading docks that can be grade level allowing vehicles to drive in or dock high allowing 18 wheelers or box trucks back in to deliver product. Retail & Restaurant SpaceIf you are looking for visibility for your company than retail space will typically have the best locations for your store or shop. Retail shopping centers, pad sites located on highway frontages, small neighborhood shopping centers, single tenant retail buildings, large big box shopping centers (aka power centers) with stores such as Petsmart & Best Buy, grocery store anchored centers, and regional outlet malls. MultifamilyMultifamily includes anything larger than a fourplex such as apartment complexes or downtown high-rise apartment buildings and condos. You will also see mid-rise, manufactured housing communities (e.g. mobile home parks), and special purpose housing. LandAny raw, undeveloped or rural land in the path of future development. You will also see pad sites for sale on many highway frontage roads. Other Types of Commercial PropertyAny other nonresidential property including hospitality, hotels, self storage units, & medical space such as nursing homes and hospitals The post What are the Different Types of Commercial Real Estate Property & Buildings? appeared first on Austin Tenant Advisors. via Blogger What are the Different Types of Commercial Real Estate Property & Buildings? The following post is copyrighted by Austin Tenant Advisors - . When looking at the different types of commercial real estate property investors and tenants have different objectives. Investors look at commercial real estate (aka commercial property) as a way to make money by generating profits from land or buildings. The primary ways investors make money with commercial real estate properties are through one or more of the following: appreciation, cash flow, and principal build up by having tenant rents pay down the loan. Many investors are looking hard at investing in Austin Tx commercial real estate. Tenants on the other hand are looking to rent commercial property in prime locations for their businesses. Since there are many different types of commercial property tenants have to thoroughly evaluate their needs to determine which type is best suited for their company. To help below I have listed the different types of commercial real estate. Office SpaceOffice buildings consist of multistory buildings in the suburbs or downtown high rises and skyscrapers with common area lobbies, hallways, and bathrooms. These larger buildings can be up to 300,000 to 500,000 rentable square feet. They also can be single tenant properties, smaller professional office buildings and condos. Short term serviced executive suites and coworking spaces would also fall into this category. Traditional office space are typically classified as A, B, or C. Class A office buildings will be the newest, nicest and most expensive buildings in the best locations, and with the best amenities. Class B offices are nice but typically a little bit older and without all the amenities. Class C buildings are the oldest, less maintained, and least expensive office buildings, and in less desirable locations. Industrial SpaceIndustrial spaces have multiple categories as they are designed to service different types of users. They will range from small Flexible or R&D properties to larger warehouse and distribution centers. Companies that rent industrial space may need a little bit of office space however a large portion of it will be warehouse space used for bulk storage, retail warehousing, manufacturing, distribution, light assembly, etc. They typically equipped with loading docks that can be grade level allowing vehicles to drive in or dock high allowing 18 wheelers or box trucks back in to deliver product. Retail & Restaurant SpaceIf you are looking for visibility for your company than retail space will typically have the best locations for your store or shop. Retail shopping centers, pad sites located on highway frontages, small neighborhood shopping centers, single tenant retail buildings, large big box shopping centers (aka power centers) with stores such as Petsmart & Best Buy, grocery store anchored centers, and regional outlet malls. MultifamilyMultifamily includes anything larger than a fourplex such as apartment complexes or downtown high-rise apartment buildings and condos. You will also see mid-rise, manufactured housing communities (e.g. mobile home parks), and special purpose housing. LandAny raw, undeveloped or rural land in the path of future development. You will also see pad sites for sale on many highway frontage roads. Other Types of Commercial PropertyAny other nonresidential property including hospitality, hotels, self storage units, & medical space such as nursing homes and hospitals The post What are the Different Types of Commercial Real Estate Property & Buildings? appeared first on Austin Tenant Advisors. via Tumblr What are the Different Types of Commercial Real Estate Property & Buildings?
from Twitter https://twitter.com/AustinTenantAdv via Blogger Akua Tiwaah thanks for following me on Twitter! https://t.co/xt9bwH2puI The following post is copyrighted by Austin Tenant Advisors - . Office Space for lease comes in all different types, sizes, building classes, and shapes. Many companies right now are favoring open office space layouts, however those are not for everyone. Maybe you like eclectic old houses zoned for commercial use or prefer an office in a downtown high rise. Whatever your needs there are many to choose from. When searching for office space for rent in Austin Tx you will come across many different types of office space. Below are a few to consider to see which ones are the best fit for your company. Traditional Office SpaceTraditional office buildings are typically multistory office towers in the suburbs or downtown that have common area lobbies, bathrooms, and hallways. In most situations landlords handle all of the repairs, maintenance, and cleaning. Parking is on a square footage basis (2-5 per 1000 sf depending on the building). So if you lease 5,000 sf you may get 10-25 parking spaces. In downtown areas parking will be an additional charge. For most law firms, financial services companies, accounting & investment firms, etc the traditional office layout works the best. Traditional office space allows your employees to have their own private rooms to work and meet with clients since confidentiality is key. Common features of traditional professional office spaces are
Most traditional office space leases require that you sign a multi year lease that is typically 3-5 years or longer. Creative Office SpaceCreative office space is also thought of as office space with an open layout. They all share a similar decor, layout, style, etc however creative offices share a few common traits such as
Creative offices encourage functional collaboration. With fewer walls between departments there is typically more transparency, collaboration, and communication between leadership, managers, and employees. Office spaces that are creative also tend to be more efficient allowing you to fit more employees per square foot. You can get more people in a space when you have fewer rooms and more rows of tables or cubicles. Startups, tech companies, creative agencies are typically drawn to creative open office space, however large companies and even law firms and financial companies are exploring this type of space to encourage communication and collaboration within and across departments and teams. Downtown High RisesThese are basically traditional offices spaces found in high density downtown areas. You will see downtown skylines painted with large class A office buildings typically 20 to 30 stories with 300,000 to 5,000 sf of rentable office space. Most of them come equipped with all of the class A amenities as described in the office building classification below. Coworking Office SpaceThese are basically shared office situations. You have the flexibility of doing shorter term leases and they come furnished. Shared meeting rooms, break areas, and desks are common. These are best for small companies or tech startups who need short term work space. You can either rent a desk, a room, or a suite of rooms. Along with the flexible commercial lease terms you get to enjoy socialized events and interaction with other tenants and companies. Executive Office SuitesThese are typically plug n play work spaces complete with furniture, phones, internet, and reception services. Regus for example will lease a full floor of a building and lease them out in smaller parcels to other companies for short flexible terms typically month to month or 3, 6, 9, 12 month increments. Old Houses Zoned For Commercial Office UseThese are basically houses that were once residential now zoned for office space use. You typically find these in or around downtown neighborhoods. These are great for those wanting their own entrance and cool eclectic space. Lot’s of creative users and tech companies like these for their proximity to downtown. Flexible Office Warehouse SpaceFor those that needs a little bit of office and a little bit of warehouse space these are perfect. It allows you to have some office space with your own entrance and an overhead door in the back for shipping and receiving. Flexible offices spaces are typically single story buildings found in semi industrial areas. You will have your own entrance and bathroom that you must maintain. You are also typically responsible for the cost of maintaining the HVAC unit. Types of Office Building ClassificationsMost office buildings are in one of the following 4 categories: Class A, Class B, or Class C, however this is not an exact science. There is not an industry wide standard on what determines a building classification. It depends on the landlord or agent, building owner, market, and other buildings in the neighborhood. Office building classes are somewhat subjective and it depends on a number of factors such as
These building classifications are not permanent as they can change depending on market trends, renovations, etc. What is Class A Office Space?Class A office buildings will be the nicest and highest quality commercial office properties in the market. You will see a mix of downtown high rises, historical buildings, and suburban office spaces that have the best locations, most recent technology and infrastructure, lots of tenant amenities such as building conference room, fitness center, showers, onsite deli, etc. Class A office space will have the highest rental rates. These buildings will attract image conscious companies such as attorneys and financial investment firms. What is Class B Office Space?Class A office buildings are a little bit older but still have nice amenities and good ownership. You will find a mix of smaller tenants looking for nice space but at a lower price. You can find class B commercial properties in prime areas but at lower prices than class A. They typically don’t offer as many amenities and services What is Class C Office Space?Most Class C office buildings are older with little to no tenant services. The finishes are lower quality both internal and external and they lack modern functionality and technological advances. They will also not be in the best locations. Rental rates in class C commercial buildings will be the lowest.
Not sure what type of office space your company needs? No worries – it varies by your company situation, size, ideal location, budget, and plans over the next 3-5 years, however we can help you find exactly what you are looking for. The post What Are the Different Types of Office Space? appeared first on Austin Tenant Advisors. via Blogger What Are the Different Types of Office Space? The following post is copyrighted by Austin Tenant Advisors - . When you lease commercial real estate in most cases you will need to do some sort of leasehold improvements. If it’s a brand new space in shell condition then obviously it will require a lot more planning and work. If it’s 2nd generation space that has been leased before it may not require as much work (only carpet and paint in many cases) unless you need to remove or add a bunch of walls. Regardless of what tenant improvements are needed the end result can determine your satisfaction. Below is the definition of leasehold improvements, a few common problems that you may encounter, and suggestions on how to avoid them What are Commercial Leasehold Improvements?The definition of leasehold improvements -Improvements done to commercial spaces that tenants rent out such as office, retail, or warehouse space. Examples are building or demoing walls and ceilings, new flooring, plumbing and electrical, cabinetry, building offices and conference rooms, etc. Leasehold improvements generally convey with the landlord upon the termination of a commercial real estate lease and the tenant moves out. The cost of the improvements is typically negotiated between the tenant and landlord. Depending on the landlord, your credit, market you are in, scope of work, total deal terms such as lease term length, lease rate, rent concessions such as free rent, etc you can generally negotiate to get them to pay for a portion or all of the improvements. The longer lease you sign the more money you can generally negotiate for commercial leasehold improvements. Common Problems with Tenant Leasehold Improvements
Ways to Avoid Commercial Leasehold Improvement Issues
The post How To Avoid Problems With Commercial Leasehold Improvements appeared first on Austin Tenant Advisors. via Blogger How To Avoid Problems With Commercial Leasehold Improvements |
AuthorThe experienced commercial realtors at Austin Tenant Advisors specialize in representing the best interests of buyers and tenants in the Search, Selection, Negotiation, and Occupancy of Office, Retail, Industrial & Warehouse Space for lease, rent, or sale in and around Travis, Williamson, Hays, Bastrop, & Burnet Counties, which are the 5 largest counties in Central Texas. We serve the surrounding cities such as Pflugerville, Round Rock, Georgetown, Leander, Cedar Park, Lakeway, Bee Cave, Sunset Valley, Dripping Springs, Buda, Kyle, San Marcos, Burnet, Marble Falls, and more. Archives
November 2020
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