What are the different types of rents for Industrial and Warehouse space?
The two most common rental structures are referred to as Industrial Gross (IG) and Triple Net (also known as NNN). IG Base Rent includes a tenant’s pro rata share of property tax and building insurance, but does not include utilities or janitorial services. Depending upon the landlord, it may or may not include a Common Area Maintenance (CAM) fee. Triple Net Base Rent is less inclusive than IG, as it also does not include taxes and insurance. When the rent structure is Triple Net, it's important to find out exactly what the Operating Expenses are.

What is CAM?
CAM is an acronym for Common Area Maintenance. CAM is the cost the Landlord incurs for maintaining common areas such as lawns, parking lots, plants and gates. CAM is sometimes passed onto industrial and warehouse tenants as an additional fee beyond Base Rent. CAM fees are usually low for Industrial and Warehouse tenants.

What are Operating Expenses?
Operating Expenses are the costs the landlord incurs for property tax, building insurance and CAM. Those costs are passed on to the tenants on a pro rata basis. A tenant who leases 25% of a property will pay 25% of the property's Operating Expenses.

How important is the municipal zoning for a building?
Whether or not a business is able to operate in a given building depends upon municipal zoning. For example, an automotive repair shop cannot necessarily operate in just any industrial building; it must find a space zoned for Heavy Industrial use. It may, however, be able to operate in a Light Industrial zone if the business receives a Conditional Use Permit from the appropriate government agency.

What is a Conditional Use Permit?
If a tenant is interested in a building which is not zoned for the tenant's business, then the tenant may petition to obtain a Conditional Use Permit (CUP). A CUP grants the tenant permission to operate a business that is non-conforming to the zoning. The application usually costs between $1,500 and $2,500, and the process may take about 90 days plus an appeal period if any neighbors have complaints. If a tenant has signed a lease before obtaining a CUP, and the CUP is denied, the tenant will still owe the full value of the lease (the monthly rent multiplied by the number of months of the lease.)

What happens if I stay in my space after my lease expires?
Unlike most residential leases, commercial leases often include a “Holdover Clause” that details what will happen if a tenant stays past the Lease End Date. Some leases stipulate the tenant must pay up to 200% of Base Rent if they overstay their lease. If you think you may stay past your Lease End Date, be sure to have a binding agreement in place with your landlord. When in doubt, consult your Tenant Agent.

What does “TI” stand for?
TI is an acronym for “Tenant Improvements”. A Tenant Improvement is work that a landlord will do to a space for a specific tenant; e.g., install tile flooring, put in a private office or update the reception area. TIs are sometimes available to industrial tenants, but are less common for warehouse tenants. In both cases, it’s a matter of rent and term — the amount of rent a tenant is paying and how long the lease term is. Landlords will spend money on TIs to get tenants if they know they can make that money back in rent. Tenants looking to pay very little rent for a one-year lease will most likely not get much in the way of TIs.

What are Grade Level doors?
Grade Level Doors are large roll-up doors for delivery trucks.

What do I need to know about electricity in an Industrial building?
It’s imperative to know how much electricity your tools and machinery will require so that you can ensure that enough power is available in the building. If you sign a lease on a property that doesn't offer the power you need, you may end up paying rent on a space you can't use. Sometimes a landlord will pay for a power upgrade, but it's always better to find out before signing the lease, since some power upgrades are cost prohibitive.