Commercial real estate leasing is quite complex, but when you need to rent space
and make a financial commitment, it’s important to educate yourself.

Doing so can help to protect your interests and enable you to negotiate the best possible deal.
Although there are numerous terms that are used in the leasing of commercial real
estate, here are a few you should know to begin the process:

1. Add-On Factor – The percentage by which the Rentable Square Footage of
premises exceeds their Usable Square Footage.
2. Building Classification – Buildings are rated according to their condition, location,
and amenities. Understanding the classification of a building can help to ensure
that the tenant is paying appropriate rental fees.
3. Capital Improvement – Any major renovation or development that extends the
life of a property, such as a roof replacement.
4. Common Area Maintenance Fees – Common Area Maintenance (or “CAM”) fees
are those paid in addition to rent for maintenance of building common areas.
5. Concessions – Inducements, such as discounted rent, free rent or improvement
allowances offered by landlords for entering into, or renewing, a lease.
6. Letter of intent – A notification that demonstrates a tenant’s desire to lease
commercial space which may, or may not, be binding.
7. Percentage Lease – A lease requiring a tenant to pay a percentage of the sales
made from its leased premises as all, or a portion of, its rent.
8. Rentable Square Footage (“RSF”) – RSF is the total usable square footage of a
tenant’s premises, PLUS that tenant’s share of various building common areas.
9. Tenant Improvements – Changes or alterations to leased premises made by, or
on behalf of, a tenant.
10. Tenant Improvement Allowance – A negotiated amount to be paid by a landlord
for build out of, or improvements to, a tenant’s premises.
11. Triple Net Lease – A type of lease that, in addition to base rent, requires a tenant
to pay its share of maintenance costs, insurance and taxes.
12.Usable Square Footage (“USF”) – USF is the area exclusively used by an individual
tenant in a commercial rental property. This does not include common areas
unless those spaces are for exclusive use of a tenant.

LeaseWatch is comprised of professionals who can provide sophisticated, customized
and economical lease administration and support services.

If you are a tenant who would like more information about understanding renewing
your commercial lease agreement, please contact LeaseWatch today at 561-998-2800 or
visit us at

The foregoing is not legal advice and is for informational and discussion purposes only.