Are you a Retail Tenant Leasing Space for your Business & Not Saving More than $3,400+ on your Fixed Real Estate Expenses?

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As a Tenant Leasing Retail Space for your Business, you can potentially Significantly Save in excess of, More than apx: +$3,456 Total or +$96/Month or -2% Overall & Drastically Cut Occupancy Cost Expenses from your Real Estate Expenses with Proper NERA - Net Effective Rent Analysis that can be extremely helpful in monthly forecasting and budgeting for your company. This is accomplished with even only 1 of many negotiable factors out of many.

#RealEstateNetEffectiveRentAnalysis There are many factors involved in Leasing Commercial Real Estate as a Retail Tenant: Base Rent, Additional NNN's or CAM's - Common Area Maintenance Operating Expenses over and above Base Rent being paid – Very Variable, primarily dependent upon Property Taxes for the property which is the largest & main component, Annual Rental Rate Increases (CPI - Consumer Price Index to keep up with inflation or fixed or stepped increases over the term) & Landlord provided Concessions - Free Rent & TI's - Tenant Improvements (allowance monies that are amortized for carpet, paint, wall movement/reconfiguration of layout, etc. to improve the space) – given as part of the package for a newly signed Lease to entice a new tenant. In order to obtain Major Cost Savings, extensive Research & proper Appraisal Analysis is needed in order to have apples to apples comparison & to obtain the best Overall Occupancy Cost Reduction.

By utilizing the Most Recent Actual Just Leased Rent Comparables - data which is Very Confidential & Personal, difficult to gather, hard to obtain and come by - Not merely Asking For Lease only (face rates), you will be extremely knowledgeable, have a considerable leg up & understand exactly what other current Tenants have just paid/signed a contract for in the targeted area for recently leased space that is similar in location, unit size square footage, specific use & physical characteristics. Completed Lease Data with Detailed Terms & Concessions are crucial and must first be extensively compiled to fill in the blanks to fully understand exact items that can then be expertly Negotiated or Leveraged by your broker in order to obtain the Best Possible Combination of Rental Rate & Terms, at the end of the day, you will be able to secured Ideal Net Effective Rent economics during your lease term occupancy to drastically cut costs.

Below is a side by side comparison case study analysis for 2 Retail units leased in the northern/middle portion of the San Fernando Valley submarket - Northridge in Los Angeles County, they show current concessions that Landlords are providing, differences or similarities on a monthly basis:

Unit Size (SF): 1,600 vs. 1,500 or +7% or 100 square feet larger

Base Rent (NNN): $2.35 vs $2.35 or 0%

Additional NNN Expenses: $0.55 vs $0.55 or 0%

Annual Base Rate Increases: 3% vs 3% or 0%

Free Rent: 3 months vs 2 months or +2% higher

TI’s: $0 vs $0 or 0% Lease Term: 36 months vs 36 months or 0%

From an eyeball first look, the first unit of 1,600 SF is larger sized and all other rent & terms are exact, intuition would initially say go with the smaller 1,500 SF space, however, due to one adjustment only, an additional 1 month of Free Rent abatement, the larger space has better economics & Better Savings: Total of $3,456 during the term or $.06 lower or 2% lower or $96/month lower - Net Effective Lower Rent of $2.78 vs $2.84/SF/month if 1,600 square feet is leased.

2 key team members are required to accomplish your goals: 1) The final step is to retain a skilled Commercial Real Estate Broker to negotiate the ideal lease on your behalf, an expert with deep local knowledge, intimately familiar with both qualitative & quantitative factors: local submarket & specific property positive and negative nuances & good relationships and insight with both property owners that know their hot buttons & other local brokers to effectively crunch numbers & negotiate the ideal lease on your behalf. The initial step is to 2) Retain an experienced, neutral third party, local Commercial Real Estate Appraiser or Consultant that is credible to provide both the most recent lease data that is objective, derived from the marketplace in addition to numerous local submarket expert opinion surveys to well support and solidify so that a few skewed comparables are not artificially high or low & mistakenly relied upon.