Lease Rates / Rental Rates

Research is conducted by brokers in many metropolitan areas to establish lease rates by property type.  The metro areas are broken down into "sub-markets" and thus buyers, sellers, landlords and tenants can identify distinct patterns with regard to rental and vacancy rates.

Rental rates reflect property features like; location, building age, building size, site size, quality of construction and interior finish.  The terms of the lease also directly affect the rate.  Short term tenants generally pay higher rental rates while longer term tenants often receive a discount.  Who, the tenant or the landlord, invests in the tenant improvements also affects lease terms.  Rental rates are competitive in that properties can generally be substituted for one another.  A Physician may pay a few percent more for a location that they desire, but in markets with many offerings they can find an alternate property if the premium is too high.

Lease rates are usually based on the net rental area, which often excludes stairs, unfinished areas and common area amenities.  Some leases, however, add hallways and common area bathroom space pro-rata into the rental area.  It is important for potential tenants to measure the areas that they plan to lease and verify that they are getting what they expected.  It is difficult to adjust lease terms after the lease has been agreed to and executed.

Tenants who have established below market lease rates are said to have a bonus value or a lease advantage.  Most leases are established with built-in cost of living / consumer price index (CPI) adjustments or re-appraisal clauses that make lease term adjustments automatically.  Many leases also have optional renewal periods that can extend the lease for several years.  

Contact us with your questions or concerns regarding Las Vegas rental rates / lease rates or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.  

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.