How the broker of record leads it
Commercial Lease Representation for Landlords and Tenants
A signed lease is not the finish line. Owners need reliable occupancy and terms that protect the value of the asset. Tenants need a location they can use and a total occupancy cost that fits the business. Those are two different decisions, and each deserves its own analysis.
Build My Space Search Brief · I Own Space: Lease It Out
The Short Answer
For a tenant the question is not only whether a space is affordable today but whether its full occupancy cost and its terms support the business for the whole lease. For a landlord it is attracting a suitable tenant without overlooking improvements, downtime and the value the lease adds to the property. At BreakThru Realty a licensed commercial agent handles the leasing under Tyson E. Sam, the broker of record.
The Rent Is Only the First Line of the Lease
A tenant sees 2,500 rentable square feet quoted at $30 per square foot per year in base rent. That is $75,000 a year. Add reimbursable expenses of $10 per square foot per year and there is another $25,000. The occupancy cost in the first year becomes $100,000, or about $8,333 a month.
That simplified figure still leaves out utilities, build-out, annual increases, deposits, any taxes not included in the expenses, parking and other charges the lease may carry. The quoted rate looks different once every line is on the page, and the right analysis needs the actual lease proposal, not a rule of thumb.
Illustrative rates, not quoted terms for any space.
A Tenant's Occupancy Cost
Enter the size, the base rent and the reimbursable expenses from a proposal. It opens on the hypothetical space above.
| Line | Arithmetic | Per year |
|---|---|---|
| Base rent | 2,500 sq ft × $30 | $75,000 |
| Reimbursable expenses | 2,500 sq ft × $10 | $25,000 |
| Occupancy cost, year one | $75,000 + $25,000 | $100,000 |
| Per month | $100,000 ÷ 12 | About $8,333 |
Formula. Annual occupancy cost = rentable square feet × (base rent + reimbursable expenses, both per square foot per year). Monthly cost = annual cost ÷ 12.
Hypothetical rates, before annual increases, tenant improvements, utilities and other charges. The calculator on this page runs in your browser with the figures you enter and sends nothing anywhere.
What Each Side Should Know Before Committing
Tenants
Start with how the business operates, then compare the written terms.
- Location, permitted use, signage, deliveries, power, loading, access and parking
- Rentable against usable square feet, staffing and the date you need to open
- Base rent, the expense structure, annual increases and when rent starts
- Improvement allowance, free rent, renewal options, assignment and guaranty requirements
Landlords
The highest opening rent is not always the most valuable lease.
- A tenant that fits the building, its other tenants and its financial requirements
- Lease length, concessions, the improvements expected and the downtime before rent starts
- Tenant credit and how much of the expenses are recovered
- The obligations the lease will hand to a future owner
A Landlord's Net Effective Rent
What a lease pays after the concessions that won it. It opens on a hypothetical five-year lease of the same 2,500 square feet.
| Line | Arithmetic | Amount |
|---|---|---|
| Base rent over five years | 2,500 sq ft × $30 × 5 | $375,000 |
| Free rent | 3 months of $6,250 | $18,750 |
| Improvement allowance | 2,500 sq ft × $20 | $50,000 |
| Net base rent over the term | $375,000 − $18,750 − $50,000 | $306,250 |
| Net effective rent | $306,250 ÷ 5 ÷ 2,500 | $24.50 per sq ft per year |
Formula. Net effective rent = (total base rent over the term − free rent − improvement allowance) ÷ years ÷ square feet.
Hypothetical terms with no annual increase and no leasing costs, to keep the arithmetic visible. The calculator on this page runs in your browser with the figures you enter and sends nothing anywhere.
Three Lease Structures, and Why the Label Is Not Enough
| Structure | In general | What to read in the lease |
|---|---|---|
| Gross | One rent covers the space and most building expenses | Whether increases in expenses can be passed through after a base year |
| Modified gross | Rent covers some expenses; the tenant pays others directly | Exactly which expenses fall on which side |
| Triple-net | Base rent plus a share of taxes, insurance and maintenance | How the share is calculated, whether it is capped and what counts as maintenance |
Descriptions of how the terms are commonly used. The lease language decides the allocation, not the label.
Commercial Leasing, by Property or Industry
- Office Space Leasing: You tour usable space and pay for rentable space. Work out the cost per usable foot before you compare addresses.
- Retail Space Leasing: For a shop, the location is part of the product. Check the use, the access and the full cost before the rent.
- Warehouse & Industrial Leasing: Write down how goods move through your operation, then look for the building. The worksheet a warehouse search starts from.
Questions Worth Asking First
- How is commercial rent calculated?
- Most commercial space is quoted as an annual rate per rentable square foot. Multiply the rate by the square footage for the yearly base rent and divide by twelve for the month. Then add whatever the lease passes through: a share of property taxes, insurance and common-area maintenance in a net lease, or increases over a base year in a gross lease. Rentable area usually includes a share of the building's common areas, so it is larger than the space you can use. Always work from the written proposal for that space.
- What is the difference between a triple-net lease and a gross lease?
- In a gross lease the tenant pays one rent and the landlord pays most of the building's operating expenses out of it. In a triple-net lease the tenant pays base rent plus a share of the property taxes, insurance and maintenance. A triple-net rate looks lower beside a gross rate because the expenses are billed separately, so the two have to be compared on total cost. The exact split, any cap on increases and what counts as maintenance are set by the lease language.
- What is a tenant improvement allowance?
- A negotiated contribution from the landlord toward the work needed to make the space ready for the tenant, usually stated per square foot. The amount is only part of the term. Ask who controls the construction, which costs qualify, when the money is paid, whether unused allowance is lost and who pays if the work costs more. An allowance is recovered through the rent over the term, which is why landlords weigh it against the length of the lease and the tenant's credit.
- Who evaluates a commercial lease before it is signed?
- Several people, each for their own part. A broker explains the economics, compares the proposal with other spaces and coordinates the negotiation within a broker's licensed role. An attorney reviews the lease language, the remedies and what binds you. An accountant can speak to how the lease affects the business's books, and an architect or contractor to what the build-out will take. Brokerage analysis is not a substitute for legal advice, so have counsel read the lease before you sign.
Who Does What
- A licensed BreakThru Realty commercial agent does the day-to-day work and is your main point of contact.
- Tyson is the broker of record: the licensed Florida broker accountable for the brokerage and every agent under it. He reviews the offers, contracts and closing statements that move through the company.
- Which agent works with you, and how the brokerage will represent you, is set out in writing before any work begins.
| Broker of record | Tyson E. Sam, Founder and Broker of Record, BreakThru Realty |
|---|---|
| Florida real estate license | 3565210 |
| Also listed as | Tyson Sam, the spelling in MLS records and on the listing sites they feed |
| Brokerage | BreakThru Realty LLC, a licensed Florida real estate brokerage |
Brokerage compensation is negotiable and is agreed in writing before any work is marketed. No fee or rate on this page is a standard one.
BreakThru Realty is a real estate brokerage. It does not give legal, tax, lending, engineering or appraisal advice: an attorney, a CPA, a lender, an inspector or an appraiser answers those questions, and a broker's opinion of value is not an appraisal.
This Page Explains the Thinking. The Service Page Does the Work.
What the brokerage does for you, step by step, and how to start is on its own page: Tenant representation.
Every figure on this page is an illustration: arithmetic on assumed inputs, shown so the reasoning can be followed. None is market data, a comparable sale, an appraisal, a forecast or the result of a BreakThru Realty transaction.
Build Your Space Search Brief
I need commercial space
Describe how the business will use the space, roughly how much it needs and when. A licensed BreakThru Realty commercial agent replies within one business day to turn it into a search brief: the use, the size, the total occupancy cost to plan for and the lease terms worth asking about.
The form asks for: Type of space; What the business does in the space; Preferred city or area; Approximate square feet; Budget or rent structure, if known (optional); Move timing; then your name, an email address or a phone number, and your consent to be contacted about the request. It asks for no documents.
Your request is with BreakThru Realty. A licensed commercial agent replies within one business day to go through the use, the size and the occupancy cost, and what to look at first. You are not committing to a space or to representation.
I own commercial space
Tell us what you own and whether you are weighing a sale, a lease or both. A licensed BreakThru Realty commercial agent replies within one business day to go through the income, the leases and the questions a buyer or tenant will ask. No documents are needed to start.
The form asks for: I want to; Property type; City or county; Approximate building size or acreage (optional); Occupancy; Asking range, if you have one; then your name, an email address or a phone number, and your consent to be contacted about the request. It asks for no documents.
Your request is with BreakThru Realty. A licensed commercial agent replies within one business day to talk through the property, its income and your options. Nothing is marketed or signed unless you decide to go ahead.
Prefer to talk? (786) 914-1017 · sales@breakthrurealty.com