We got a building for our own business but have some room to lease. Call center would like to move in and they are just starting out so only expect 4 employees to start with. We have a rent set for that. But as they start growing the expenses will go up and we need to make sure we are not paying them to stay in. How would we structure the lease agreement if they have 15-20 employees?
@irina gav What expenses do you anticipate going up? Many commercial leases are structured where the tenant is responsible for picking up its pro rata share of the expenses over a base year (the first lease year). I am not sure if that would be acceptable in your market. Perhaps you can have the tenant rent escalate a certain percentage annually to offset or partially offset the growth in expenses. Best of luck.
We used to own a call center until we decided life was a lot easier in RE than the call center business. (Although it made us a great living for over 20 years, we didn't have time to enjoy life!) I am not sure what kind of lease you are supplying (Full Service to NNN), but things to keep in mind about a call center are that many call centers are open 24 hours a day / 365 days a year. That is a lot more wear and tear on your space than a typical M-F 8a-5p tenant. If it is a full service tenant, that is a lot more cleaning, a lot more HVAC and a lot more things that seem simple but can add up -- toilet paper, paper towels, etc.
Thank you all for replies. After thinking it over more than twice we decided to decline the lease to them. There are other tenants who might leave if noise from call center will interfere with their work and I would rather keep them and keep looking for a more suitable tenants.
One thing great about call centers is that it is typically VERY EXPENSIVE for them to move so you may have a tenant for the long haul!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing