What Are The Things To Look Out For In An Industrial Gross Lease?

Leasing is the main source of income for commercial real estate owners, along with flipping properties. Such Gross leases, like the IG lease, come with options, e.g., how much rent should be charged?  Does the Gross lease last? Which lease should be used? etc.

This article covers:

1. An industrial gross lease.
2. The structure of an industrial gross lease.
3. Advantages of a Gross Lease.
4. Lease Calculator.
5. How Sands Investment Group can help.

1. An industrial gross lease:

It is a modified gross lease for multi-tenant industrial buildings used by the land-lords Tenants pay for a share of utilities and services that are provided by the landlord. It’s the landlord’s responsibility to pay property taxes and insurance. The lease specifies exactly the services that are provided by the landlord. An IG lease is a combination of a modified and triple-net lease. It can also be taken as a net lease, where the tenant has to pick up some property expenses. It is also called a modified gross lease because the landlord provides services like insurance, repairs, and property taxes with the tenant’s rent.

2 . The form of the IG lease

The landlord should know how to form their IG lease as it may affect financing for Industrial buildings.

3. The Concept of the Base Year:

Special terms like base-year references to the structure of the IG lease. The base year is the first year of the tenant’s lease. It includes taxes, insurance, maintenance, and other utility expenses. It also refers to the cost of operating expenses in the first year.

4. Common Area:

An area in a building that serves multiple tenants, e.g lobby, vending machine area, elevators, etc. It may also include locker rooms and security offices. An IG lease also specifies that the tenant will share the expenses (utility and maintenance) of the common area.

5. Tenant Expenses:

The tenant may pay for extra services such as garbage pickup according to the terms and conditions of the lease. 20 to 25% may be added to the cost of services besides the rent. The landlord bears other expenses. But if you use a base year, the tenant will have to pay expenses exceeding the first-year cap.

6. IG Rent:

It often appears with the lease. It simply means that the tenant shares the building’s operating expenses. In other words, the rent includes shared expenses.

7. Advantages of an IG lease:

Through the use of base year caps, an industrial gross lease landlord has some protection against rising expenses. Therefore, expenses are passed on to the tenants by the landlords. The tenants enjoy the services provided by the landlord.

8. Lease Calculator:

This calculator in advanced mode allows the tenant to calculate the base rent and other operational expenses. These expenses depend on the terms of the lease. This is useful for an IG lease, as only some expenses belong to the tenant.

9. How Sands Investment Group can help:

This investment group will help in arranging finance for commercial projects with no limit. For complete financial services, contact such groups. Through a network of private investors and banks, these investment groups can help you finance buying or renovating an industrial or warehouse property.

IG modified gross lease and modified gross lease are almost the same. A triple net is also beneficial because it specifies that the tenants are responsible for taxes, insurance and maintenance of common areas