LeaseWithEase is a free website assisting tenants, brokers and landlords with lease analysis and enhancing their decision process.
LeaseWithEase was developed to strengthen the lease negotiation process and assist in the selection of a commercial lease. The more leverage a tenant can acquire the more opportunity a tenant will have to save 10% to 20% through lease negotiations. LeaseWithEase has the ability to gain that leverage by demonstrating the financial differences between two leases. Whether you are a tenant or representing a tenant LeaseWithEase can assist you in acquiring that financial leverage. LeaseWithEase can also assist in a company’s budget review by creating a yearly operating budget based on a company’s existing lease or proposed lease.
LeaseWithEase will assist you in simplifying the process of calculating the financial impact of your next lease. It’s easy and quick to compare two leases. Input the major points of the lease and let LeaseWithEase calculate the financial impact of each lease. The financial differences will give you leverage for negotiations.
For example:
Building A and Building B are two comparable office properties. Through LeaseWithEase you have determined that Building A’s lease proposal has an average annual rent of $20.00 per square foot and Building B’s lease proposal has an average annual rent of $22.00 per square foot. LeaseWithEase has now given you financial leverage to negotiate Building B’s annual rental rate down to $20.00 per square foot or a 10% savings on your operating cost. LeaseWithEase allows you to print off the summary or export a cash flow.
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Rentable Square Feet: The square footage that equals the usable square feet plus the tenant’s pro rata share of common areas such hallways, bathrooms and lobbies. Most cases tenant pays rent based on the rentable square footage.
Usable Square Feet: The square footage of the tenant’s actual space. Usable square feet does not include common area space.
Loss Factor: The number resulting from dividing the difference of rentable square and usable square feet by the rentable square feet.
Inflation Rate: The rate of increase of the average price level. Application for LeaseWithEase is the rate of increase of the operating expenses.
Discount Rate: The discount rate represents the discount on the future cash flow.
Lease Term: The length of the lease.
CAM: Common area maintenance is the operating cost of maintaining the common areas of a property.
Taxes: Real estate taxes paid by the owner of the property.
Insurance: Insurance paid by the owner of the property.
Miscellaneous Expense: Other expenses paid by the owner of the property.
Reimbursable Expenses: Expenses that are reimbursed by the tenant. Most expenses are reimbursed of one of two ways: pro rata share or using a base year. The amount can be based on the tenant’s pro rata share of those expenses per the square footage the tenant leases. A base stop or base year can be used to determine a tenant’s reimbursement expenses. See base stop for definition
Pass Throughs: See Reimbursable Expenses
Base Stop: A base stop is the amount of the that particular expense that the tenant will reimburse its pro rata share for any amount above the base stop. Ex: In 2003 a tenant signs a lease for five years and the real estate expenses equals $2.00 per square foot. The tenant’s base year or base stop would be $2.00 per square foot. If the following year the real estate taxes increased to $2.10 per square foot then the tenant would reimburse $.10 per square foot in real estate tax expenses.
Tenant Improvements: The dollar amount required to remodel or improve a tenant’s space.
Landlord Contribution: The dollar amount that a landlord will contribute towards the improving the tenant’s space. See Tenant Improvements.
NPV: (Net Present Value) The value of a cash flow determined by reducing its value by the appropriate discount rate for each unit of time between the time when the cash flow is to be valued to the time of the cash flow. Time value of money.