STAR-BATT INC. |
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Specializing in Multi-Tenant Light Industrial Space for Lease. |
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A) "T.M.I." Is real estate abbreviation for Taxes (Real Estate Taxes), Maintenance (C.A.M.), and Insurance on the real estate. |
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A) Most likely the quoted you a triple net rate since by definition the triple net rate sounds like a better deal. This is true since it does not include T.M.I. |
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A) The rate is the annual rate meaning you take per square footage of the space times the rate and divide the total by twelve to figure out the monthly rate. Example if the rate is $5.50 NNN and the square footage is 2000 sq. ft. then $5.50 * 2,000=$11,000.00 annually or by dividing by 12 equals $916.67 per month at a triple net rate. |
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Frequently Asked Questions |
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A) No, Industrial Leases are generally distinct in nature and usually based on the theory that the landlord conveys use of a building and the land to the tenant for use. The Tenant pays rent plus must maintain the building and the site, pays the real estate taxes, and pays the insurance necessary for protecting the building and site. These three previous mentioned items of cost are generally referred to as "T.M.I." For taxes, maintenance & insurance. The proper way to refer to this type of lease is "triple net" and is written shorthand as "NNN". |
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Q) Are Industrial Leases like Commercial Retail Leases or Office Leases? |
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Q) I was quoted a $5.50 (triple net). What does this mean? |
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Q) The rate I was quoted did not specify NNN or Gross. What does this mean? |
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Q) What is T.M.I.? |
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A) The Landlord offers both types of leases. Most tenants occupy less than 6,000 sq. ft. usually take a Gross Lease. Tenant taking more than 6,000 square feet tend to take a Triple Net (NNN) style lease. The reason is without sufficient square footage the possible savings for a triple net lease does not outweigh the potential risk exposure. |
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Q) Do you use a Gross or Triple Net (NNN) Lease? |
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A) Yes. In fact the Tenant has only set of keys to the unit. |
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Q) Do I have 24/7 access? |
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A) For spaces under 6,000 square feet it is almost always beneficial to go with a gross lease. Spaces over 6,000 square feet need an analysis which must take into account the property taxes due date, the age of the building, the state of repair, the cash flow needs of the company since payments can very widely, the historical spread between the actual rate, Historically East side properties (Roseville, Warren) use gross rate and West side properties (Farmington Hills) have been Triple Net (NNN). I suggest for budget purposes it is wise to figure on the Gross rate. |
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Q) Which is better a Gross or Triple Net Lease? |
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A) Almost all times light industrial space has the utilities individually metered to each unit. If you are not sure, ask for a representation by the Landlord how the utilities are supplied. |
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Q) Who pays for utilities? |
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A) The gross square footage is traditionally used since the premise is that the Landlord is renting the entire site and building. Even if you only occupy a portion of the building. This is directly opposite to office space rentals which usually rent net space and does not count the outside walls. Don't worry though, the significant lower light industrial rate more than makes up for the difference in space. |
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Q) The quote and lease refer to gross square feet, is that the same as |
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A) This varies from community to community but generally all communities accept any business to business activities, companies which need warehousing of their products, assembly of components, contractors, distributors, machinery repair, electronics, laboratories, storage, and manufacturing facilities. |
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Q) Who belongs in light industrial zoning? |
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All square footage on this web site is approximate, information on this web site is subject to change without notice.
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1928 Star-Batt Drive, Suite E Rochester Hills, MI 48309 |
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To contact us: |
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Phone: 248-853-1525 Fax: 248-853-1511 |
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STAR-BATT INC. |
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© 2006 Star-Batt Inc. of America |