Austin Office Lease Rates
The most significant part of any lease with an Austin office lease is the rent schedule. For the landlord, it sets the income stream over a specific term and for the tenant it allows them to understand their upcoming expenses that impact their profitability. An office lease schedule and rates are market dependent and drilling down from there sub-market dependent as well. A tenant cannot expect every Austin office such as Round Rock office space to be the same as Downtown Austin office space. Austin Office lease schedules are based on supply and demand, higher supply correlates to lower office lease rates.
Austin Office Space for Rent
High lease rates can often keep tenants out of an office property, therefore a smart landlord will adjust their lease rates accordingly to keep their property as full as possible.
Generally office lease rates and schedules will have a base rate, a base rate is the starting lease rate for the office. From the base rate there are typical lease rate increases depending on the type of property and the occupancy rate within the type of commercial real estate a tenant is looking to lease in. In addition to office lease schedules there are expenses that are added to the base lease rate. These expenses are called NNN (triple net) expenses and are always in addition to the base lease rate if you have a NNN lease in place.
Office Lease Calculations
The calculation of an office space for rent is done by taking a price per square foot per year and dividing it by 12 X the square footage of the space to get the monthly lease rate. Here is an example:
1,000 SF @ $12.00 per SF per yr is $1.00 per SF per month (12/12) X 1,000 SF = $1,000.00/ month for the monthly lease rate.
Usage of common areas such as restrooms, elevators, lobbies, storage bins etc are incorporated into the office lease schedule. As an example of efficiency of office space if 10% of the overall square footage of the office property is non productive it is said to have a 90% efficiency. Efficiency factors play an important part for investors looking to invest in an office property for cash flow and income.