How much is Your Warehouse Rent -- Really?
Industrial and warehouse rental rates -- how landlords quote the rent
Industrial rental rates can be deceiving and difficult
for the layperson to understand. It is because of this we must be sure
to get clarification on how landlords quote rent.
Your industrial occupancy costs are primarily made up of four (4)
components:
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Different landlords quote their rent differently and the difference can represent up to 30% of the overall occupancy costs for a given location. The following shows the differences in quotes and how they differ:
Industrial Gross (IG)
This quote is the most accurate basis for comparing the cost to occupy any given industrial property. This quoted rental rate will include Base Rent, Property Taxes, Insurance, and CAM. Quoted on a per square foot basis per year, this will render the most complete analysis of cost to occupy.
Triple Net (NNN)
This quote will only include the Base Rent per square foot per year. If quoted
this way, we must determine how much additional expenses are related to Taxes
Insurance and Cam per square foot per year so that we can compare apples to
apples between different options. These costs can account for up to 30% of your
occupancy expense.
There are some other derivative for quoting rent, however, these are the two
most common. As you can see, it is critical to understand how rental rates are
quoted, and to make sure that we are not missing any material components
necessary for determining the best facility for your company.
