What is Gross Rent in Commercial Real Estate?

Posted by admin on December 3, 2012 under by Tim Davis, Commercial Real Estate Definitions, daytona beach commercial real estate, Uncategorized | Be the First to Comment

daytona commercial real estate, what is cap rate, what is triple net, what is a gross lease, gross rent,Just a few moments ago I was having a conversation with a property owner about leasing up 10,000 SF of warehouse space in a 40,000 building that he owns. I know this owner, and have been in contact with him over the years keeping track of the lease situations in all of his various assets. When the topic of our converstaion turned to my prospective tenant, and the lease rate I felt we could get them committed at, the question arose, “is that triple net?” Great question, and not at all out of the ordinary. But when I replied, “no, it is gross rent” he had several followup questions about exactly what gross rent meant.

It seems that as commercial real estate professionals, we have spent the last decade(or more) educating the world as to what “triple net” and “NNN” means on our marketing materials. There are several types of leases in between net and gross, (modified gross, double net, etc) but it seems that maybe we have overlooked clearly explaining what a gross lease is to our customers.

With all of that said, in our market a lease rate per square foot(per year) GROSS means you will collect that amount from the tenant, plus applicable sales tax. That is all – nothing more. No CAM, no tax/insurance, landscaping, capital reserves, etc. This is the simplest and most basic way to quote a rental rate.

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