Commercial leases are complex financial documents. There are issues of tenant improvement allowances, how that money is spent by tenants to improve the property, and how the landlord recovers that allowance, in the form of rent, over the term of the lease. There are issues of “CAM,” common area maintenance expenses, that are allocated among tenants. There are issues of rent escalators provisions through the term of the lease. There may also be the fundamental issue of whether the lease is triple or double-net or gross, and what that means from lease to lease. All of these essential economic factors play a very important role in drafting commercial leases. This program will provide you with a practical guide to understanding the economics of commercial leases and the drafting issues they raise.
- Math of Leases: Essential Calculations to Understand Before Drafting Leases
- How certain financial metrics or calculations can cause substantial drafting errors
- Underlying economics of commercial lease provisions
- Rental start dates, lease years, and annual “elevator” clauses
- Measurement of usable space, load considerations, and re-measurement
- Intricacies of determining Common Area Maintenance expenses and proportionate shares
- Determining gross sales for percentage rent purposes
Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for ethics, elimination of bias or Kansas credit.