by admin | Apr 2, 2025 | Commercial Real Estate
As of January 1, 2025, The Illinois Real Estate License Act was amended, which brought several huge changes into Illinois Law as it relates to Commercial Real Estate. All licensees in the State of Illinois must now have a written brokerage agreement for all clients and all transaction types. This includes when working with a seller, buyer, landlord, tenant or investor and includes residential, leasing, commercial, and property management transaction types. The amended license act also requires that brokerages disclose in their written agreements, whether on the seller/landlord side or buyer/tenant side, all amounts of compensation they will charge their own clients and any amounts they might pay to other cooperating brokers in transactions.
by admin | Mar 9, 2025 | Commercial Real Estate
I just sold another commercial office building. This building was used as a dental office. If you have a commercial building that you want to sell, I can help. Call, text or email me. I am a seller representative specialist who works 7 days a week!. I specialize in dental and medical properties as well as multi-unit properties.
by admin | Dec 8, 2024 | Commercial Real Estate
What is a Modified Gross Lease in Commercial Real Estate?
A modified gross lease is a hybrid type of lease agreement that combines elements of both gross leases and NNN leases. Under this structure, the landlord typically covers the base operating expenses, such as property taxes, insurance, and maintenance, while the tenant agrees to pay for specific additional costs, like utilities or janitorial services.
In other circumstances, the Landlord sets a base year for the additional rent and the tenant pays the increase in CAM (Common Area Maintenance) and Real Estate taxes from the base year to the new year. The responsibilities are negotiated upfront, providing both parties with clarity and flexibility.
Key Points of a Modified Gross Lease
- Shared Costs: The landlord and tenant split increase in operating expenses based on terms outlined in the lease.
- Predictable Base Rent: Tenants pay a fixed base rent, covering agreed-upon landlord expenses.
- Flexibility: This lease type is tailored to meet the unique needs of both the landlord and the tenant.
- Cost Stability: While tenants pay for certain extras, they avoid the unpredictability of entirely net leases.
- Customizable: Negotiations determine which costs are covered by whom.
Example of a Modified Gross Lease
Imagine a tenant leasing 2,000 square feet of office space in a 10,000-square-foot building. The landlord includes property taxes, insurance, and common area maintenance in the base rent of $25 per square foot. The Landlord sets a base year for CAM and real estate taxes and the tenant pays the increase from the base year to the new year.
This arrangement allows the landlord to maintain property standards while providing the tenant with manageable costs and autonomy over their specific usage.
A modified gross lease strikes a balance, offering both landlords and tenants a fair, transparent, and adaptable lease structure tailored to their respective needs. It’s an excellent choice for businesses seeking cost stability without the complexity of a fully net lease.
Sharon Bogetz is a residential and commercial real estate broker with Century 21 Universal since 2019.
by admin | Nov 20, 2024 | Commercial Real Estate, Residential Real Estate
Last week in a 50-0 vote, Chicago’s City Council voted against Mayor Brandon Johnson’s proposal to increase property taxes. The proposed property tax hike was part of the mayor’s plan to address a $500 million budget gap for fiscal year 2025. It will still be a challenge for the Mayor to make up the shortfall Chicago is facing.
If you own property, you will be able to better manage your expenses. If you own residential or commercial property in Chicago, property taxes should not be a concern for your buyers. If you are buying property in Chicago, you should not expect a tax hike.
IF you are looking to buy or sell real estate in Chicago, call Sharon Kantor Bogetz at 847-370-9131. She currently has listed a residential condo for sale and a commercial property for rent in Chicago. She has been a realtor with Century 21 Universal since 2019.
by admin | Nov 19, 2024 | Commercial Real Estate
This is the second of a series of 3 blogs explaining the different types of commercial rent structures. A Triple Net Lease (NNN lease) is a common leasing structure in commercial real estate where the tenant assumes responsibility for the property’s operating expenses in addition to paying base rent. These operating expenses typically include property taxes, building/property insurance, and common area maintenance (CAM) costs which might include snow removal, security, water, garbage, parking lot maintenance, etc. NNN Leases are common in retail, office and industrial real estate, offering stability for landlords while tenants bear the risks and rewards of property-related expenses.
Key Features Of A NNN Lease:
- Base Rent: This is the fixed rental payment the tenant agrees to pay the landlord. It compensates the landlord for the use of the property and often depends on the location, size, and market demand.
- CAM Charges: Common Area Maintenance expenses cover the upkeep of shared spaces, such as landscaping, parking lots, hallways, or lobbies. This ensures the property remains functional and attractive. A tenant would pay their proportionate share of of the total CAM charges for the property. This may be a variable expense item.
- Pass-Through Costs: Property taxes and insurance are passed directly to the tenant. These costs can fluctuate annually, depending on tax assessments and insurance premiums. A tenant would pay their proportionate share of of the total CAM charges for the property. This may be a variable expense item.
- CAM and Pass-Through Costs may also be called Additional Rent in your lease agreement.
Example Of A NNN Lease:
Consider a retail strip center where a tenant leases a 2,000 sq. ft. space for $25 per square foot annually in base rent. In addition to the base rent ($50,000 annually), the tenant also pays their proportionate share of the property taxes, insurance, and CAM. If the total annual operating expenses for the center are $120,000 and the tenant occupies 10% of the center’s rentable area, their share of the pass-through costs would be $12,000. Thus, the tenant’s total annual cost in this NNN lease would be $62,000.
If you are looking for a commercial space, contact Sharon Bogetz at 847-370-9131. She’s been working with owners, investors, healthcare providers and commercial tenants since 2019.
by admin | Nov 4, 2024 | Commercial Real Estate
This a the first of a series of 3 blogs explaining the different types of commercial rent structures.
When leasing commercial space, understanding the type of lease agreement is crucial. One common lease type is the gross lease, which is also sometimes referred to as a full-service lease. But what exactly does a gross lease entail, and is it the right choice for your business? Let’s dive into the basics and look at a practical example.
What is a Gross Lease?
A gross lease is a lease structure in which the tenant pays a fixed rent amount, while the landlord covers most, if not all, of the property’s expenses. These expenses can include property taxes, insurance, maintenance, and often even utilities. For tenants, this type of lease provides predictable monthly costs, which can make budgeting simpler and easier.
Because the landlord assumes responsibility for property expenses, gross leases are often found in office buildings and shared commercial spaces where landlords manage the majority of building operations.
Imagine renting office space in a large office complex with a gross lease. As the tenant, you pay a set amount each month. This amount is inclusive of the costs associated with property taxes, building insurance, and maintenance. The landlord handles all maintenance and operational expenses, such as cleaning common areas, maintaining landscaping, and ensuring the building is secure.
Example of a Gross Lease
With this setup, you’re able to focus on running your business without worrying about additional costs. Gross leases can be ideal for businesses looking for predictability and simplicity in their lease agreements.
Is a Gross Lease Right for You?
If you value consistent expenses and prefer not to manage variable costs like maintenance and insurance, a gross lease may be an excellent fit for your business. However, it’s essential to clarify which specific expenses are covered under your gross lease, as lease structures can vary.
Sharon Kantor Bogetz, MBA is a commercial real estate broker licensed in Illinois and Indiana. She works with owners, tenants and investors.
