DH Leasing FAQ

DH Leasing FAQ


How is my square footage measured?

Subject to particular lease agreements, most commercial retail spaces are measured from the midpoint of all common walls to the outside surface of the predominant building material of the exterior walls. Office buildings typically carry a load factor which includes a percentage of public areas such as lobbies and corridors.

Back To Top

Do I need insurance?

All leases require that tenants carry commercial general liability and property damage insurance in an amount of at least one million dollars combined single limit. Higher limits may be required in some cases. In all cases, the landlord is required to be named as an additional insured. DH Management requires that tenant provide evidence of coverage prior to taking possession of the premises.

Back To Top

What type of signage is available?

Commercial properties are required to comply with sign codes and ordinances applicable in the city in which they are located. Signage in some commercial centers is controlled by operating agreements between property owners. In addition, most properties have an individual sign criteria incorporated into their leases. The sign criteria generally allow for a facade sign and placement on a monument sign, if available. Some properties allow placement on directory boards or under-canopy signs. In addition, signage may generally be installed on the inside surfaces of storefront windows. Banners, A-frames and pennants are generally not permitted by city codes, lease agreements or by individual property sign criteria.

Back To Top

How is my pro-rata share calculated?

A tenant’s pro-rata share is the percentage that the square footage of the leased premises bears to the gross leasable area (GLA) of the property.

Back To Top

What are the NNN Expenses?

NNN expenses include common area maintenance expenses, real property taxes and insurance.

A budget of estimated CAM, insurance and Real Property Tax expenses is set every year. Each tenant’s pro-rata share is calculated and tenants are billed prorata of the annual estimate each month. At the end of each year, we compare the actual expenses against the sum of your monthly contributions. If we under-collected, you will be invoiced for the amount due and if we over-collected, you will receive a credit.

Back To Top

Why do I pay Common Area Maintenance (CAM), Insurance and Real Property Tax Contributions every month?

All retail leases are triple net (NNN) leases. These are leases in which the tenant pays a pro-rata share of CAM expenses, insurance premiums and real property taxes, in addition to base rent every month. CAM expenses may include, but are not limited to, items such as the cost of parking lot lighting, landscaping, security services, refuse collection, asphalt repairs, property management fees, etc.

Back To Top

How do I pay my rent?

Once you are a tenant, DH Management, mails you an itemized rental statement every month with a payment stub and pre-addressed return envelope for your convenience. Rent and other monthly obligations are always due on the first of each month, even if our statement does not reach you. All rent checks should be made payable to “_______________________________________”. Please be aware that late fees may be applied to your account if rent or other sums due are not received by the date indicated in your lease.

Back To Top

What is a "Make Good"?

A “Make Good” is the tenant’s obligation to return the premises to their original condition at the end of the lease term as existed prior to the time the tenant took possession. Normal wear and tear is excluded.

Back To Top

What additional costs am I responsible for over and above net property rent and operating expenses?

In addition to a pro-rata share of property operating expenses, tenants will generally be responsible for the cost of gas and electricity; non- structural interior maintenance and repair expenses such as light bulb replacement; premises cleaning; maintenance, repair and replacement of doors and windows; furnace and air conditioning (if available) maintenance, repair and replacement; pest control, telecommunications; etc. Items defined as structural e.g. roof deck, exterior walls, etc. are the responsibility of the Landlord.

Back To Top

Will I be able to sublease or assign my lease?

Most commercial property rentals allow the existing tenant to sublease or assign their premises. Typically, the Landlord is unable to unreasonably withhold consent to a sublease/assignment. A prudent Landlord however will consider the strength of covenant being offered by the incoming sub-tenant when deciding whether or not to offer its consent. A Landlord will usually only accept a sublease/assignment if the financial position/security of the proposed sub-tenant is the same or better than that of the existing tenant.

Back To Top

What are the differences between: Gross Rent and Net Rent?

Gross Rent is the total rent calculated inclusive of all non-structural recoverable building and exterior operating costs (T.M.I. – property taxes, maintenance and insurance) whereas Net Rent is the rent calculated before including such recoverable costs.

Back To Top

If we plan on either opening a new business or relocating an existing business, how much time do we need to find the right commercial property and move in?

Begin your search for commercial property early. If you are opening a new business, you do not want to find yourself under time constraints dealing with issues which you may not have considered. If you are relocating an existing business to a new property, allow yourself more time than you feel you may need because you will be conducting business as usual in your existing location during this time. Generally speaking, you should begin your business property search efforts 4 – 6 months before your move date. By planning well in advance, time will be your ally, not your enemy.

Back To Top

How do I calculate my monthly rental obligation, if commercial property rent is quoted on a per square foot a year basis?

Commercial property rental payments are the sum of the Net Rent, the Additional Rent (sometimes referred to as the T.M.I.) and the applicable G.S.T. Your monthly property rental rate would be calculated by multiplying your rentable square footage by the yearly net rental rate, and then dividing the result by 12. A similar calculation is done for the Additional Rent.

For example, if you have 1000 rentable square feet, and the annual net rent per square foot is $6.00, 1000 x $6.00 = $6000. $6000 / 12 = $500.00 a month in rent.

Similarly, if the annual additional rent per square foot is $3.42, 1000 x $3.42 = $3,420. $3,420 / 12 = $285.00 a month in rent.

The monthly property rent payable would be the sum of the net rent and additional rent ($785.00 in the example above). 5% G.S.T. is then added for a total monthly property rental in the amount of $824.25.

Back To Top