Autograph Triple Net Lease Agreement Made Easy

Analyze lease

hey guys this is Justin from braking to CRE calm and in today's video what we're going to do is break down commercial real estate leases specifically what you need to look out for for the next commercial real estate lease that you analyze so if you're underwriting retail properties office properties industrial properties and you want to know how to work through a long lease document without wasting time and the real things that you need to look out for make sure to stick around for this video [Music] now on this channel we talk about real estate investing careers in real estate financial modeling so if you're looking to break into the industry for the first time or advance your existing career make sure to hit that subscribe button and hit that notification bell as well now if you've ever read a commercial real estate lease you probably know that these documents can be extremely long and also extremely difficult to sift through but after reading a lot of commercial leases throughout my career and trying to save time in the process I put together a list of the top seven things you need to look out for when you're analyzing your next commercial real estate lease now these seven things are going to be really helpful when you're analyzing a new acquisition opportunity so when you're going into a property where you haven't had any control over how these leases are actually signed you're definitely going to want to know these seven details that are going to have a big effect on your overall underwriting and valuation of the deal so let's get into it with number one and that's the square footage of the premises now the square footage of the premises is the square footage of that tenant suite now sometimes this may also include the square footage of the entire property and with that the lease also may include the tenants total pro rata share of the overall square footage at that property and in those cases it's really helpful to reference in case there's any sort of discrepancy between the Landlord and Tenant as far as what kind of operating expenses are owed from that tenant to that landlord if there are operating expense reimbursements at the property now number two is the exact start date and end date of the lease now this seems really straightforward and should be a very straightforward thing in the lease but often times what you'll see is that the leased commencement date when that lease actually starts or that rent commencement date when that rent actually starts is dependent on some event that occurs after that lease is signed so oftentimes you'll see this as some sort of a construction period where the lease is signed and then six or nine months later the construction is expected to be complete and within that lease document you'll see that the lease commencement date or the rent commencement...