Office Space

[Artashes]

I am on the lookout for an office space in Montreal, but since I never involved myself in such decisions, help me understand the terms I am not familiar with (living in Russia for most of my live).

So an ad listing would have the following information:

Office Address

Suite space: 1000 sq. ft

Rent : $12/Sq Ft


Can you tell me what the monthly rent is? From the price levels we have in Montreal, the $12/sq ft. rate must be an annual rate...

Best,

 

[vito]

That would be $1000 a month

$12(1000) divided by 12 months = $1000.

What you need to find out is whether the rate is net or gross (this will dictate what else is included in the price).

Vito

 

[Artashes]

It looks like it is: Gross rental rate.

I have seen: Gross rental rate (mininal); Gross rental rate (maximum); Asking net rent (min / max); Semi-Gross rental rate (?) What is the difference?

Thank you.

 

[vito]

Gross Rental Rate:
is comprised of two components: net rent and "additional rent" (realty taxes and operating costs). Typically, the net rental rate is fixed for a period, while the "additional rent" is subject to change as it is based on actual costs incurred to operate the property.

Gross Effective Rent:
is calculated by combining the net effective rent with the building's quoted realty taxes and operating expenses.

Net Effective Rent:
is the net income derived from a lease after deducting all costs incurred by the landlord for procuring the lease, including costs such as leasehold improvement allowances, real estate fees, free rent, etc.

Net Rent:
(also known as Face Rent) is the quoted rental rate stated on a per square foot basis, excluding taxes and operating cost recoveries.

Vito

 

[Artashes]

Thank you, Vito. Nobody could have explained it better!
Appreciate it.

The biggest concern was calculating the appropriate rent numbers. Now at least I will be able to tell what certain space runs for.

 

[vito]

Nobody could have explained it better!

Being perfectly honest, I won't take credit for it... other than knowing how to copy/paste from a site explaining it all...

Vito

 

[Artashes]

It doesn't matter. With all the experience, I didn't even think of searching for explanations. So thanks again!

 

[pmhoran]

One other thing you should keep a watch out for is ... was the ad placed by the owner of the building OR a realtor/broker or his legal rep.

Ran into it years ago when I was scouting for a new building to lease for the company I ran. My realtor/broker was sourcing out most of the prospective sites ... but I ran across a few ads on my own that were placed by not necessarily well informed owners of the buildings.

A couple felt NET RENT just meant I would pay them so much a month and pay my own utilities. No doubt the legal guys would have caught up on the errors when it was time to sign papers. But make sure you know what is what before it gets to that point ... that everyone is talking apples and not apples & oranges. Saves a lot of needless time & expense.

Peter

 

[Artashes]

Thanks for that Peter. Looks like at this stage I am looking for a fixed deal. Not looking for the prettiest environment to work in - rather functional. As long as there is enough space - I am happy.