August 23, 2010

A Guide for Commercial Real Estate Tenants: Understanding the Variable Cost Risks of a Commercial Lease

By Dan Morrison

Organizations choose to lease commercial space for a variety of reasons, including: long-term financial objectives, ability to access limited resources, questionable long-term market viability and other considerations strategic to their individual business needs. Unfortunately, organizations often fail to fully understand the financial risks associated with the leases they engage in beyond base rent factors. This article discusses the nature, financial risks and management considerations for recurring lease-related occupancy costs.