If you are considering opening a business in Florida and want to rent, instead of purchase, property for your business, there are a number of leasing options available. There are three basic commercial leases available, designed around two different methods of calculating rent: gross or net. Choosing the right calculus for your business depends on the type of business you run, your monthly operating expenses, and the services—if any—for which you would prefer to pay.
“Gross” rent is a lump sum paid by the tenant each month. Additional expenses, such as cleaning common areas, building insurance, taxes, and parking lot repair, for example, are paid directly by the landlord. Like a residential lease, the gross rent amount does not vary month to month, which provides the business with consistency in its overhead costs. This can appeal to new businesses just getting up and running, smaller businesses with lower profit margins, smaller mom and pop tenants in shopping centers, small offices and smaller industrial tenants in multi-bay warehouses; these types of businesses usually prefer to forecast their expenses annually.
With a “net” rent, the monthly amount is smaller, with the tenant paying the usual building expenses that would ordinarily be paid for by the landlord, such as taxes, maintenance, and insurance. Tenants in a multi-unit commercial space reimburse the landlord for expenses. If the tenant is the sole occupant of the commercial space, there may be the added benefit of cost savings and clarity in operating costs. The tenant would be in the position to competitively price any services for which it is responsible in the lease without any price markups a landlord might add.
However you decide to lease your commercial space, it is vital that you pay close attention to the terms of the lease. Be explicit in setting out those terms you are willing to pay for and those that are the responsibility of the landlord. The clearer the language in the lease, the better off your business will be.