Understanding the Most Common Types of Commercial Leases

Starting a business can be difficult, especially when you don’t have a commercial property to work out of. Whether you’re looking for a warehouse to store your goods or an office space to send your employees, Tampa is a great place to set up shop.

There’s plenty of restaurants, great weather, and a low cost of living. Some office spaces also grant you a view of the beach.

But what kind of commercial lease should you sign up for, and what are the differences between commercial leases?

Full-Service Lease

A full-service lease, otherwise known as a gross lease, is one of the simpler types you can choose. The tenant pays a certain amount every month, and the landlord covers operating expenses. This includes the cost of utilities and janitorial services.

While this type of lease favors the tenant, it also comes with some of the most restrictions. Most likely, the tenant will be unable to make any significant alterations to the property or operate heavy machinery. As a result, you’ll only see these offered for smaller office spaces and the like.

On the plus side, a full-service lease means your business will have less to worry about as it grows in size.

Modified Gross Lease

A modified gross lease operates much like a normal gross lease, except the tenant agrees to pay for additional expenses. The landlord still covers property taxes and insurance, but the tenant might agree to pay for repairs and maintenance.

While a full-service lease means relying on the landlord for maintenance, a modified lease gives more control to the tenant. However, you may end up paying less overall if you handle cleanup and repairs yourself rather than relying on your landlord’s first choice.

Modified gross leases see use in buildings with multiple tenants by landlords who want to lessen their own responsibilities.

Triple Net Lease

The terms of a triple net lease give the tenant the most control of the three main commercial leases. With it, the tenant pays rent and all operating costs, such as real estate taxes, insurance, and maintenance.

As such, someone renting out a commercial space gets to make more exact financial decisions when it comes to their business space. A landlord benefits from it by giving it more time to focus on other matters.

Startups and other small business may find a triple net lease puts too much responsibility on them, as they’ll have to deal with liability insurance and navigating taxes.

Choosing Between Commercial Leases

Whichever form of agreement you decide on will depend on the landlord and your own desires. If you simply want a place to set up your business, a gross lease lets you do that. A triple net lease is more for larger companies renting out an entire building.

Compare rates between all the different commercial leases available to determine your best choice.

At HSW Associates, you can look at available properties and apply for a lease online. Contact us if you have any questions or would like to see a rent quote.

< Back to Blog