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Commercial Office Lease Terminology 101: What to know before you sign on the dotted line

commerical office leaseYou’ve found commercial office space, and you’re ready to sign your lease. But before you do, make sure you’ve done your homework.

Whether you’ve hired an attorney to help you negotiate or you’re a seasoned professional going it alone, it’s a good idea to brush up on your commercial office lease terminology. Here’s a quick primer on common lease types and commercial office lease terms and what they do – and don’t – mean.

Common Area Maintenance (CAM)

Common area maintenance costs derive from the care of building areas that are used by all tenants. CAM areas can include spaces such as hallways, lobbies, restrooms, sidewalks and parking lots. Your lease should spell out the CAM areas (and related maintenance services, such as snow plowing, landscaping, etc.) included in your rent.

Double Net Lease (NN)

A double net lease incorporates taxes and insurance into your lease payment, but the landlord is responsible for paying maintenance costs.

Gross Lease

When you sign a gross lease, you agree to pay for your space’s square footage, and your landlord agrees to pay for all other operating expenses, including utilities, maintenance, insurance and property taxes.

Leasable Area

“Leaseable area” is a blend of your office square footage plus a percentage of the square footage in the building’s common areas.

Improvements and Alterations

If you plan to customize or otherwise alter your leased space, make certain that you and your landlord are on the same page about who is responsible for doing the work, how long the work will take, and who will pay for it. You will also want to iron out how the changes you plan to make will impact your rent now and in the future.

Insurance

Your landlord may require you to carry insurance to supplement policies they carry on your building. It’s a good idea to discuss your insurance needs with your insurance agent before you sign a lease. To learn more about commercial insurance needs, see Commercial Renters Insurance: Does Your Small Business Need It?

Maintenance and Utilities

This clause spells out your responsibility to maintain your leased space. Are you responsible for paying utilities or are they included in your rent? Is routine maintenance covered under your lease terms? How about housekeeping services? This section of your lease should answer these types of questions.

Net Lease

A net lease includes your cost per square foot, as well as some costs associated with daily operation of the property, including common area maintenance (CAM) costs, utilities, insurance and property taxes.

Permitted Use

The permitted, or general, use clause will define how you are allowed to use your leased space. Permitted use will depend upon a number of factors, including building location and zoning laws, but might include such uses as manufacturing, retail and food service. Communicate your business as fully as possible when searching for space to ensure that your prospective landlord and prospective office space can meet your needs.

Premises

The premises clause should clearly define the space you’ll be leasing. In addition to physical office space, for example, your lease may give you access to common areas, such as conference rooms, break rooms, parking lots and storage rooms.

Renewal Option

You may have a renewal clause in your lease giving you the right to extend your lease term. The renewal clause should include a start and end date and specify rent costs.

Term

The term clause states your lease start and end dates. Although it seems like a no-brainer, be sure to read the fine print. Some lease terms begin the date you sign the lease; others begin upon move-in. Be sure the lease you’re signing defines your start date so you know when you can move in and when rent begins.

Triple Net Lease (NNN)

A triple net lease is a lease agreement where the tenant (or lessee) is responsible for the property’s ongoing expenses, including real estate taxes, building insurance, and maintenance, in addition to paying rent and utilities.

Signing a lease is a big step for your business, so it pays to make sure you know what you’re signing before you put your name to it.

“Don’t be afraid to ask your landlord to walk you through your lease, and be sure to ask questions along the way,” says Willard Anderson, partner at The Anderson Group. “A reputable landlord and a fair lease have nothing to hide.”


The Anderson Group helps keep your small business running. For information about commercial property management services or available commercial properties in our portfolio, contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.

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An Office Space of Their Own

Office Space

John Graziano, president of Capitol Hill Management Services, Inc.

Capitol Hill Management Services Finds the Perfect Fit with The Anderson Group

After seven years at his company’s Western Avenue, Albany, NY location, John Graziano, president of Capitol Hill Management Services, Inc., decided it was time for his firm to spread its wings.

“We had about 5,000 square feet of office space, and I was looking for more. I also wanted the ability to design our office space to meet our needs,” he says.

He spent a few years searching for a building he could buy, but he was unable to find one that checked off all the boxes. So, he turned to The Anderson Group.

Now settled into his new 10,500-square-foot office space at 230 Washington Avenue Extension in Albany, NY, Graziano says his company has found its home. The office currently houses 32 employees with plenty of room to grow.

“The Anderson Group redid our office space to our specifications and their staff worked seamlessly with our staff and contractors to make sure it’s exactly what we need,” Graziano says.

He and his employees are also pleased with the new office’s location, providing an easy commute to the airport and downtown Albany. In addition, he says the office is now centrally located for his employees.

“The whole process was great,” he says. “There were no problems.”

Susan Touhey, managing partner at The Anderson Group, says they work hard to ensure just that.

“We want our tenants’ office space to meet their needs over the entirety of their lease,” Touhey says, “It’s about building positive working relationships from Day One.”


Capitol Hill Management Services, Inc., an association management and government affairs firm, provides an array of professional services for more than 50 state, national and international organizations.

To learn more about The Anderson Group’s portfolio of available commercial properties, contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.

 

 

 

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Winter is coming. Is your office building ready?

winter office building

Winter is coming. Is your office building ready?

It may still feel mild outside, but living in the Northeast there is no doubt that winter is, indeed, coming. That makes this the perfect time of year to make sure your office building is ready for the colder months – and the usage changes, temperature drops, and potentially damaging weather events that come with it.

“A few routine maintenance steps now can help prevent costly problems this winter,” advises Dave Eck, maintenance manager with The Anderson Group. “Winter can bring everything from burst pipes and leaking roofs to heating problems and slippery sidewalks and parking lots.”

Here are some of the most important maintenance areas to add to your office building’s winterization checklist:

Heating system

The Environmental Protection Agency reports that in the U.S. alone, buildings account for 39% of total energy use, 68% of total electricity consumption and 38% of carbon dioxide emissions. And as a facility owner, it likely represents one of your largest expenses. Tuning up and optimizing your HVAC system is a good first step. Inspect, clean and repair your furnace and boilers, and change your air filters.

Leaks

Find and seal leaks that could let warm air out or cold air in. This may mean applying caulk or weather stripping around doors and windows or installing storm doors and windows. Also, if your building uses gas heat, be sure to check gas lines and connections for leaks and corrosion.

Roof

The flat roofs typical of most commercial buildings need regular maintenance during snowy winter months. Conduct a weekly inspection and clearing of your roof throughout the winter, keeping an eye out for pooling water and ice or snow buildup. Built-up precipitation and melting snow and ice can lead to costly leaks and affect your roof’s structural integrity.

Gutters

Make sure all roofs and gutters are clean and free of leaves and other debris that could clog them. Remember, pooling water from rain, sleet and snow can build up and cause water leakage inside your building.

Parking lots, sidewalks and yards

Clear leaves, sticks, branches, and other debris from the yard, landscaping, walkways, and common areas outside your building. Before storms and after clearing snow, use deicers on exterior walkways and parking lots to prevent ice from forming and to keep people safe from slip-and-fall accidents.

Technology and Data

Protect data and equipment from costly power outages due to winter weather. Consider backing up your files via cloud-based storage, which secures your data daily and eliminates the risk of data loss when a severe storm hits. In addition, test your back-up system and make sure computers and sensitive electrical equipment are connected to surge protectors.

Sprinkler Systems

Test your sprinkler systems and make sure they are protected from cold air so your pipes don’t freeze. A frozen sprinkler system is an unusable sprinkler system.

Winterizing your office building may seem like a never-ending list of chores, but investing the time and money now can save you a bundle of time and money in the long run.

“Preparation is key to lessening or eliminating the impact of extreme and routine winter conditions on your facility,” Eck says. “Experience has shown that it’s more than worth the time and effort you put into it.”


 

The Anderson Group helps keep your small business in great shape. For information about commercial property management services or available commercial properties in our portfolio, contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.

 

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How Do You Take Care of a Spotted Zebra? Ask The Anderson Group Property Management Co.

The Spotted Zebra wanted to run its center not worry about property management.

The Spotted Zebra Learning Center is a state-of-the-art, year-round, preschool program designed to prepare children of all abilities for kindergarten and the state’s high learning standards. The learning center and its programs, formerly located on Kross Keys Drive in Albany, became so popular that they simply ran out of room. So executive director, Sheri Townsend, began the search for a larger facility.

property management

Back: Jane Schulke, bookkeeper; Jason Ford, activities coordinator; Matthew Ryan, director of programs
Front: Sheri Townsend, executive director; Shannon Harmon, director of special education programs

In 2013, the organization found one, purchasing the building at 26 Computer Drive, just off of Wolf Road. In doing so, the learning center increased its usable space from 4,000 square feet to 12,000 square feet.

“Our new building is three times the size of our old one,” Townsend says. “It gives us an opportunity to grow our services and meet our families’ and community’s needs.”

She says their old space was near a very busy road. The new space, however, has a yard for children to play in and is located on a dead end that abuts a quiet, residential neighborhood. Townsend says she likes that their location on Computer Drive makes the facility more centrally located to major highways. The Spotted Zebra draws students from around the Capital Region, from a 25-mile radius throughout the Capital Region.

And although The Spotted Zebra owns their building, they turn to The Anderson Group to manage it. The Anderson Group provides The Spotted Zebra with everything from housekeeping services and grounds maintenance to HVAC, electrical and plumbing services.

“We shopped around when we were searching for a property management company. As an agency, we need to follow the three-bid rule,” Townsend explains. “We put out a request for proposals. The Anderson Group’s proposal was the most comprehensive, and all of their client feedback was positive.”

As property managers, Townsend says The Anderson Group goes above and beyond.

“The Anderson Group is responsive morning, noon and night. Whenever I send an email or text, they respond immediately. Whenever we have an emergency issue, they are here very quickly,” Townsend says. “They are very meticulous. We are never left un-served.”


For more information about The Spotted Zebra Learning Center, visit their website or call (518) 438-4800. For more information about The Anderson Group’s property management services, contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.

 

 

 

Posted in Albany NY Business, Ask The Expert, Commercial Office Space, Commercial Property Management, General News, Managing Your Business, Office Housekeeping Services, Office Productivity, Small Business Articles, Tenant News | Tagged , , , , , , , , , , | Comments closed

Office space leaser, beware: How well do you know your commercial landlord?

office space landlordIf you’ve ever leased office space, you know how important your background is to a prospective landlord. They often want to know your income, credit score, and the contact information of several people who can vouch for you.

But did you ever think to turn the tables on a prospective landlord? When you’re entering into a commercial lease, it’s a good idea to spend some time researching the person or company from whom you’ll be renting, because their reputation should be every bit as important to you as yours is to them.

What you should know

Here are some basics you’ll want to know about your commercial landlord or property manager before your business moves in.

  • Who is the landlord?

It may seem like an obvious question, but it’s one that shouldn’t go unasked. Who is the individual (or who are the individuals) behind the name? Are they local or are they “managing” your property from afar? Will you be dealing with a bank, an large corporation, or an actual person? And will they, or a representative, be immediately accessible in the event of an emergency? Doing a little digging on who – and where – your landlord is can save you a lot of hassle down the line.

  • How does your landlord rate on office maintenance and repair?

This question applies to proactive and reactive maintenance and repair work. As you walk through the property, you should take notes. Does the landlord keep systems and machinery in good working order? Are the parking lots well maintained and well lit? Is the interior clean, attractive and odor free? A landlord that takes pride in his or her office buildings preserves their value, builds stronger landlord-tenant relations, and ultimately adds credibility to your business.

  • How does your landlord stand in the community?

Good news may travel fast, but bad news travels faster. That’s why it’s good to know what others think and say about your prospective landlord. Does the landlord have a reputation for being fair and honest with his/her commercial tenants? Do they attract the kinds of businesses you want to be associated with? Are they active in professional organizations, charities and volunteer efforts in your community? Their involvement in and contribution to your community shows they care about making it better and stronger for those who work in it.

How you can find out about your prospective landlord

There are many ways to get the skinny on commercial landlords and property managers. Here are a few of the easiest and least expensive.

  • Contact local business organizations

Check with your local chamber of commerce and your regional Better Business Bureau and see if there have been any problems with or complaints against your prospective landlord.

  • Conduct a good “old-fashioned” Google search

If you haven’t already, fire up the computer and do an online search on your prospective landlord and your prospective new office address. Look for articles, reviews and ratings on the property or owner. Whether they’re good or bad, they’re sure to tell you an awful lot.

  • Interview current tenants

Before you sign a lease, interview the experts – that is, your prospective landlord’s current tenants. Let them know you’re considering space in the building, and ask them questions about repairs, parking, rent, fees, and responsiveness. Existing corporate tenants might have sage advice to offer you before you make a decision.

Good landlords not only won’t mind that you’re doing a little pre-deal fact checking, they’ll expect you to do a little pre-deal fact checking.

“We have a fairly comprehensive sit-down with all of our prospective tenants. It’s as much about them learning all about us as it is us learning all about them,” says Andy Anderson, partner at The Anderson Group. “We encourage questions and we will gladly help facilitate conversations with new and longstanding tenants. Reputable commercial landlords and property management companies have nothing to hide.”


The Anderson Group helps keep your small business running. For information about The Anderson Group or available commercial properties in our portfolio, contact Susan Touhey at 518-458-7726 or stouhey@tagny.com.

 

 

Posted in Albany NY Business, Ask The Expert, Commercial Office Space, Commercial Property Management, Managing Your Business, Small Business Articles | Tagged , , , , , , , , , | Comments closed