Understanding Lease Rates

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There are three main types of lease rates:  Triple Net (NNN), Modified Gross (MG), and Full Service Gross (FSG).  Some landlords might offer their space differently, but the majority follow the three main types listed above.  The type used will also vary depending on the type of property one is interested in.  This can be confusing and overwhelming when one is trying to find space to lease.  My goal is to break it down so that it is a bit easier to understand.

 

Most retail, flex or industrial buildings and a few office buildings use the NNN lease rate.  This means that in addition to your quoted lease rate you also pay utilities, janitorial service, taxes, insurance and common area maintenance expenses.  At the beginning of the year the landlord will give you an estimated number for the taxes, insurance, and common area maintenance (snow removal, parking lot lights, etc).  These three expenses will be paid monthly based on the estimated number.   The utilities and janitorial services are set-up by the tenant individually as needed.  Sometimes you will find a property that includes water or some other utility in the NNN expenses.  This means that the property is not separately metered and therefore allocated through the NNN expenses.  This can be a good thing if you are a tenant the uses a larger amount of that particular service or it can also be a bad thing – it all depends on what type of tenant you are and the other tenants in the property.

 

A Full Service Gross (FSG) lease type is mainly used for office buildings.  This means that in the quoted lease rate, all utilities, janitorial services, taxes, insurance, and common area maintenance are INCLUDED.  A “base year for operating expenses

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N Academy Blvd
Sale Transaction

$10M Luxury House Sale in Denver

Jansen, Kaufman & Groothuis PC leased 1,524 SF of office space at 7901 Southpark Plaza, Suite 201 for 2 years. Jeff Brandon and Matt Kulbe of NavPoint Real Estate Group represented

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NAVPOINT REAL ESTATE

CONFIDENTIALITY / NON-CIRCUMVENTION

NON-DISCLOSURE AGREEMENT

NavPoint Real Estate Group (“Broker“) has been retained as the exclusive Broker regarding the sale of the property located at the address noted below.

To receive an Offering Memorandum (“Offering Memorandum“) please read this Confidentiality Agreement and agree to the terms. The details and information contained within the Offering Memorandum were obtained from sources deemed to be reliable. Verification of the information contained within the Offering Memorandum are the sole responsibility of the Potential Purchaser. No representation is made to the accuracy of the information by Seller or Broker. THIS AGREEMENT is made and entered into by and between NavPoint Real Estate Group and “Potential Purchaser” and shall become effective when executed by Potential Purchaser or Potential Purchasers Broker.

A. Commencing with discussions held between their respective representatives the parties have pursued and expect to continue to pursue discussions (the Discussions) relating to the potential sale of:

In the course of these discussions, Seller has disclosed to Potential Purchaser and may continue to disclose to Potential Purchaser certain information of proprietary and confidential nature (“Confidential Information”).

B. Seller will provide to Potential Purchaser certain printed, typed and handwritten materials and other tangible materials containing or relating to Confidential Information (“Documentation”).

In order to protect the Confidential Information, both during the term of the Discussions and after their expiration or termination, Potential Purchaser agrees as follows:

  1. Potential Purchaser shall maintain the Confidential Information in strictest confidence and shall not disclose to any third party any Confidential Information received from the other party. In addition, Potential Purchaser shall ensure that its officers, employees and agents likewise maintain the Seller’s Confidential Information in strictest confidence and that such persons do not disclose such Confidential Information to any other party. Potential Purchaser shall not have the right to use, duplicate, reproduce, copy, distribute or disseminate Confidential Information except for purpose of the discussions and negotiations as needed.
  2. Potential Purchaser agrees to limit access to Confidential Information received from the Seller to its own officers and employees on the absolute need-to-know basis solely for the purpose of the Discussions, and to use the same degree of care in reserving the secrecy of the Confidential Information furnished by the Seller and/or Broker as it uses in preserving the secrecy of its own Confidential Information.
  3. Notwithstanding the conclusion or termination of the Discussions, Potential Purchaser shall continue to fulfill its obligations hereunder for a period of one (1) year from the date of disclosure. Upon termination of the Discussions, all Confidential Information, including all forms of Documentation shall be returned to the Broker, including any copies or adaptations made by the receiving party.
  4. The obligation of Potential Purchaser under Paragraphs 1 and 2 above shall not apply or shall cease to apply to any information which Potential Purchaser can demonstrate by reasonable documentary proof- (a) to have been in the possession of Potential Purchaser at the time it was first disclosed by the Seller and/or Broker; (b) was in the public domain at the time it was disclosed to Potential Purchaser; (c) entered the public domain through sources independent of Potential Purchaser and through no fault of Potential Purchaser; (d) was lawfully obtained by Potential Purchaser from a third party who is free to disclose such information to Potential Purchaser; (e) to have been at any time developed by Potential Purchaser independently of any disclosure from the Seller; or (f) has been in the possession of Potential Purchaser for more than five (5) years.
  5. Potential Purchaser shall not have any right to register any copyright, trademark, service mark or corporate name based upon Confidential Information or otherwise register or claim any right to use any Confidential Information disclosed to it by the Seller without the express written consent of Seller and Broker. Nothing herein, and no disclosure of Confidential Information or Documentation pursuant hereto, shall be deemed a grant to Potential Purchaser, whether by implication, estoppels or otherwise, of any right or license under any industrial property right of the Seller.
  6. The Discussions shall continue until the date on which an Agreement shall have been concluded or the date on which either party shall have given written notice to the other of termination of the Discussions. All obligations of the parties hereunder shall survive any termination of the Discussions.
  7. Each party acknowledges and agrees that the unauthorized disclosure or use of Confidential Information disclosed to it by the other party or any other breach of its obligations will result in irreparable injury to the party, which furnished the Confidential Information. Therefore, each party agrees that the injured party shall be entitled to receive injunctive relief in any legal proceeding instituted by such injured party.
  8. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of Colorado, USA.

For purposes of creating a binding contract in determining the rights and obligations under such contract in any court of law, the parties acknowledge that a signature reproduced by either digital signature, electronic signature, facsimile or photocopy shall have the same force and effect as an original signature and that the original and any such copies shall be deemed one and the same document. In the event this Non-Disclosure Agreement is submitted electronically, this agreement is provided under the Uniform Electronic Transactions Act – Col. Rev. Stat. §§ 24-71.3-101 et seq. By submitting this agreement, you are confirming your agreement to submit this Non-Disclosure Agreement electronically, and your indication of agreement, along with information provided, will have the same force and affect as if this agreement was submitted manually and your manual signature was provided. You should retain a copy of this agreement for your records.

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