What are the differences among Class A, Class B and Class C office space?
Class A office buildings are newer buildings with large lobbies, multiple elevators, wide hallways on each floor, ADA compliant restrooms and entries, on-site building security, ample parking, and high-end finishes throughout the building. Class B properties may have some of the features, but not all,  offered by Class A buildings. They may have smaller lobbies, narrower hallways, or may not have been perfectly maintained. Class C space is less well-maintained, offers lower rents, and may house non-traditional office tenants.

What is a Common Area? Who pays for it?
In a multi-tenant office building, there are often common areas used by all tenants, such as the lobby, elevators, restrooms or parking lots. Office tenants pay rent on all these areas. However, instead of charging tenants an extra fee for use of Common Areas, landlords determine each tenant’s pro rata share of the Common Areas, and then add that percentage to the “rentable” square footage.

What is a Load Factor?
The Load Factor of a building is the percentage of the building that is Common Area, or used by all tenants. This percentage is used to determine how much extra rent per square foot tenants should pay to cover their pro rata share of rent for the Common Areas.

What is the difference between “rentable” square footage and “usable” square footage?
“Rentable” square footage is the amount of square footage on which you pay rent. “Useable” square footage is the actual amount of square feet in your suite. Rentable square footage includes a Load Factor, which is the tenant's pro rata share of the Common Area. If 10% of an office building is Common Area (for example, elevator, hallways, and restrooms), then the rentable square footage includes a 10% Load Factor. In this example, the “rentable” square footage of 1,650 square feet actually has a “usable” (the actual size) square footage of 1,500 square feet. The extra 150 square feet for which the tenant is paying rent is that tenant’s pro rata share of the Common Areas.

What are Operating Expenses?
Operating Expenses are what a tenant pays to cover its pro rata share of Common Area Maintenance (CAM), taxes and insurance for the building.

What are the different types of rent?
The most common types of rent for office space are Full Service, Modified Gross and Triple Net (NNN). Full Service is the most comprehensive rental structure, inclusive of most real estate-related expenses a tenant would normally incur. Most Class A buildings offer a Full Service rent to smaller tenants.

A Modified Gross rent will usually include a tenant's pro rata share of Operating Expenses, but might not include utilities or janitorial services.

The least inclusive type of rent is Triple Net. The type of rent is “net” of the tenant’s pro rata share of taxes, insurance and common area maintenance (CAM), which means there will always be an additional monthly fee for Operating Expenses. With Triple Net, it’s imperative to know what these expenses are up front so they can be factored into a company’s real estate budget.

What does “TI” stand for?
TI is short for “Tenant Improvements”. A Tenant Improvement is work that a landlord will do to a space for a specific tenant; e.g., install a conference room, a private office or kitchenette. Most landlords will offer new paint and carpet for new tenants. Additional TIs are often available to office tenants, but it’s always 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 attract 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 happens if I stay in my office after my lease expires?
Unlike most residential leases, commercial leases often include a “Holdover Clause” that details exactly 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 is “Plug and Play” office space?
“Plug and Play” is a term used to describe office space that includes furniture, phones systems and data wiring. However, some landlords do not include chairs in their Plug and Play space, while others may not include phone. Therefore, it is imperative that tenants ask for a detailed list of exactly what is included in these properties.

Is there a charge for using air conditioning after the building’s hours of operation?
Charges for after hours air conditioning are common, especially in larger office buildings where there isn’t one air conditioning unit per suite. Charges vary widely, but are normally incurred on a per hour basis.

What is a Base Year?
A Base Year is the year for which your Operating Expenses are based. So if a Tenant has a 2006 Base Year on a Full Service lease, then the quoted amount of Operating Expenses is fixed for the year. Any increases the landlord incurs and wants to pass through to tenants must be actual increases over a tenant’s Base Year.