Commercial Rentals: How Much Should a Tenant Budget?

Budget for the full cost of your commercial space, including operating expenses, business needs and possible rent increases.

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How much should you budget for a commercial rental? Start with the full cost of occupying the space, including the expenses your lease assigns to you and the costs of running your business there. Base rent alone does not answer the question. That matters because a lease can put property taxes, maintenance and other expenses on the tenant. Rent can also increase over time. A budget needs to account for both what you pay now and what might change. What does your rent actually cover? Your lease should detail additional costs such as property taxes, common area maintenance (CAM), utilities and janitorial services. Read those terms to understand who pays each expense. The distinction between an expense included in rent and an expense paid separately shapes your total occupancy costs. A triple net lease means you pay most operating expenses. A gross lease bundles all costs into the rent. That is a real reason to give the rent figure more weight under a gross lease: those costs are already included. But the lease structure does not remove the need to budget for your business operations. Furniture, equipment, internet, phone lines, security systems and required permits or licenses still be