When a business leases an industrial property, it can be vulnerable to unknown costs. Every business person should become educated regarding the facts of industrial leasing. Boca Raton, FL, has many of these properties available and will make an excellent example for this discussion.
Buildings are typically listed at the cost per square foot, per year. It is up to the business consumer to calculate the monthly lease expense. For example, if a property is on the market for twenty dollars a square foot and it has twelve hundred square feet, the monthly lease cost will be twenty times twelve hundred divided by twelve, which is two thousand dollars per month. This community in Florida easily has leases on the market in this price range.
A service business usually leases one office or a suite of offices. A business that manufactures goods often leases the entire building. However, the potential costs of common areas must still be considered. Buildings located in an industrial park may have to share common maintenance costs, such as landscaping maintenance or keeping the parking lot well lit. Take the time to identify any common area costs that may exist.
Other costs also need to be known and identified clearly before committing to any contract. Property taxes, utilities and insurance represent added costs to the building owner. In some instances, the owner passes all or a portion of these costs onto the business leasing the property.
Typically the lessee will be required to purchase insurance as a condition of the lease. The property manager will request proof of coverage that identifies the amount of coverage and policy period. The property manager may also require proof annually from the the lessee that the policy is active and has not lapsed.
Manufacturing in most cases includes the storage of some of the inventory and the goods used to manufacture the product. The threat of fire and water damage can destroy part or all of inventory and production goods. The manufacturer needs to have sufficient insurance to cover the costs of these losses. These destructive events may also damage the building itself. Insurance coverage is for your benefit and for the benefit of the property owner.
Every geographic area has its own unique set of issues for the lessee. Florida is humid and can be subject to severe storms or even hurricanes. The building should be solid and built to withstand these threats. Security is another concern. The building should have a working alarm system that detects fire and the threat of burglary. There may also be the cost of paying for a security patrol service. Manufacturing areas can be subject to criminal activity, especially after business hours. The terms of the lease should identify the party responsible for paying these costs.
As illustrated there are several sources of additional expenses, other than the monthly lease cost. Careful research and review of all contracts is necessary to identify all costs to determine if this property is within the budget. A business needs to take the time to uncover all these facts in order to make an informed decision.
Buildings are typically listed at the cost per square foot, per year. It is up to the business consumer to calculate the monthly lease expense. For example, if a property is on the market for twenty dollars a square foot and it has twelve hundred square feet, the monthly lease cost will be twenty times twelve hundred divided by twelve, which is two thousand dollars per month. This community in Florida easily has leases on the market in this price range.
A service business usually leases one office or a suite of offices. A business that manufactures goods often leases the entire building. However, the potential costs of common areas must still be considered. Buildings located in an industrial park may have to share common maintenance costs, such as landscaping maintenance or keeping the parking lot well lit. Take the time to identify any common area costs that may exist.
Other costs also need to be known and identified clearly before committing to any contract. Property taxes, utilities and insurance represent added costs to the building owner. In some instances, the owner passes all or a portion of these costs onto the business leasing the property.
Typically the lessee will be required to purchase insurance as a condition of the lease. The property manager will request proof of coverage that identifies the amount of coverage and policy period. The property manager may also require proof annually from the the lessee that the policy is active and has not lapsed.
Manufacturing in most cases includes the storage of some of the inventory and the goods used to manufacture the product. The threat of fire and water damage can destroy part or all of inventory and production goods. The manufacturer needs to have sufficient insurance to cover the costs of these losses. These destructive events may also damage the building itself. Insurance coverage is for your benefit and for the benefit of the property owner.
Every geographic area has its own unique set of issues for the lessee. Florida is humid and can be subject to severe storms or even hurricanes. The building should be solid and built to withstand these threats. Security is another concern. The building should have a working alarm system that detects fire and the threat of burglary. There may also be the cost of paying for a security patrol service. Manufacturing areas can be subject to criminal activity, especially after business hours. The terms of the lease should identify the party responsible for paying these costs.
As illustrated there are several sources of additional expenses, other than the monthly lease cost. Careful research and review of all contracts is necessary to identify all costs to determine if this property is within the budget. A business needs to take the time to uncover all these facts in order to make an informed decision.
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