We are about to sign a lease on a commercial building are the rates increase
Every year? We will be signing a ten years lease they want a 2.5 percent increase every year!!
It’s very common for yearly rate increases to be built-in to commercial property leases – 2.5% is actually fairly conservative. Rate increases are typically built-in to compensate for annual inflation and yearly increases in rents in a particular area. If you didn’t build in yearly rate increases, it would be much harder to get a long-term lease and you’re rent would probably increase substantially whenever you renewed your lease.
For more information on leasing commercial property, be sure to check out our Ultimate Guide to Lease Commercial Real Estate.
Hope this helps,
I agree with Dock, from having worked in industrial real estate for 5 years, yes, it does increase year over year. Are you working with an agent? I would recommend working with a commercial real estate agent before signing anything. (And yes, I’d highly suggest an agent who specializes in commercial and not residential)
You must be logged in to reply to this topic.
Not signed in?
Sign in to participate on our website!
315 Madison Avenue, 24th Floor
New York, NY 10017
Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.
Product or company names, logos, and trademarks referred to on this site belong to their respective owners.