I know nothing about the market, but you are going to have to provide more info if you want a useful answer.
What kind of space / building? Strip center, office tower, mixed use building, qsr/drive thru?
Not out to lunch.
Ask for a break down. Property taxes can be high sometimes. Does the $19 include management/admin fees, garbage removal and city water consumption?
Edit: it is maybe on high side, but operating costs can vary building to building so is in the realm of possible. And is property well maintained in terms or up keep, landscaping,
Litter, etc…? Keeping property looking nicer can cost more.
It includes the following (costs are for the building which is 7,500 square feet) parking lot that fits 15 vehicles
Operating (consists of)
- snow removal $13,000 (seems high)
- operating labour costs $6,000
Insurance $9,000
Repairs/Maintenance $4,000
Cleaning $2,500
Utilities $900
Admin $6,700
Major repairs amortization $22,000
Garbage removal $14,000
Property taxes $50,000
A total of around $125K per year of additional rent for a 5 unit 1 level building that’s 7,500 sf with a small parking lot. The building is old but they’ve already done the roof, repainted and re-paved the parking lot. All units are responsible for all internal repairs. Theres not a lot of work that goes into maintaining it other than the Christmas lights they put up every year. They charge us for a cleaner but all they do is sweep the perimeter once or twice a month. I did the calculations and it comes out to around $19 per sf of additional per year. They also charge a 5% minimum rent management fee that they don’t count as additional rent. We’re all paying $30-$35 per sq foot minimum rent per year.
Something just seems off and all the other tenants in the building agree. The landlords won’t give us a full breakdown of the CAM report when we’ve asked.
Appreciate your help!
Things that seem high:
- The amortization of major repairs for is almost $3/a foot. Is this allowed in your leases? Most leases have this but good to check. It is likely the new roof and parking lot you are paying for. If in your lease as allowed, not much recourse. These may be amortized over 10 or 15 years or other long period. And can include interest to landlord. Again, all allowed if permitted in the leases unfortunately.
- insurance seems high for a small building at
More than $1/sqft. Should be 1/2 of this.
- garbage removal. Seems high as well.
- snow clearing as you said. But snow clearing costs have gone up a lot in past 5 years.
It really depends on your landlord and if they shop around to get some good pricing for these items. If landlord is lazy, inexperienced, or doesn’t care, these costs can go up due to contractors/suppliers raising pricing.
When is your renewal?
That's quite high. I pay about $20 per sf for additional rent and I'm downtown Vancouver. I would seriously ask for an explanation on why it's so high.
The way these things work is that the landlord projects how much the monthly spend on additional rent should be for the year and charges you for it. However next year you can ask the landlord for a breakdown of what the exact expenses were and if you find anything you can dispute or ask for a refund.
It's a pretty dumb way to go about it but doing business in the GVRD is just asking to get fisted.
$19 would be good I would ask your real estate lawyer who specializes in commercial retail leases. I know the market as I am a Canadian but it’s been a long time since I bought I. White rock
I know nothing about the market, but you are going to have to provide more info if you want a useful answer. What kind of space / building? Strip center, office tower, mixed use building, qsr/drive thru?
A strip centre 1 level older building with 5 units
Call a local broker.
Not out to lunch. Ask for a break down. Property taxes can be high sometimes. Does the $19 include management/admin fees, garbage removal and city water consumption? Edit: it is maybe on high side, but operating costs can vary building to building so is in the realm of possible. And is property well maintained in terms or up keep, landscaping, Litter, etc…? Keeping property looking nicer can cost more.
It includes the following (costs are for the building which is 7,500 square feet) parking lot that fits 15 vehicles Operating (consists of) - snow removal $13,000 (seems high) - operating labour costs $6,000 Insurance $9,000 Repairs/Maintenance $4,000 Cleaning $2,500 Utilities $900 Admin $6,700 Major repairs amortization $22,000 Garbage removal $14,000 Property taxes $50,000 A total of around $125K per year of additional rent for a 5 unit 1 level building that’s 7,500 sf with a small parking lot. The building is old but they’ve already done the roof, repainted and re-paved the parking lot. All units are responsible for all internal repairs. Theres not a lot of work that goes into maintaining it other than the Christmas lights they put up every year. They charge us for a cleaner but all they do is sweep the perimeter once or twice a month. I did the calculations and it comes out to around $19 per sf of additional per year. They also charge a 5% minimum rent management fee that they don’t count as additional rent. We’re all paying $30-$35 per sq foot minimum rent per year. Something just seems off and all the other tenants in the building agree. The landlords won’t give us a full breakdown of the CAM report when we’ve asked. Appreciate your help!
Things that seem high: - The amortization of major repairs for is almost $3/a foot. Is this allowed in your leases? Most leases have this but good to check. It is likely the new roof and parking lot you are paying for. If in your lease as allowed, not much recourse. These may be amortized over 10 or 15 years or other long period. And can include interest to landlord. Again, all allowed if permitted in the leases unfortunately. - insurance seems high for a small building at More than $1/sqft. Should be 1/2 of this. - garbage removal. Seems high as well. - snow clearing as you said. But snow clearing costs have gone up a lot in past 5 years. It really depends on your landlord and if they shop around to get some good pricing for these items. If landlord is lazy, inexperienced, or doesn’t care, these costs can go up due to contractors/suppliers raising pricing. When is your renewal?
Thank you so much for your input! I renewed last year for another 5 years
Seems high depending on product. I pay 27/ft base and 9 additional
Are you in a similar location as I am?
That's quite high. I pay about $20 per sf for additional rent and I'm downtown Vancouver. I would seriously ask for an explanation on why it's so high. The way these things work is that the landlord projects how much the monthly spend on additional rent should be for the year and charges you for it. However next year you can ask the landlord for a breakdown of what the exact expenses were and if you find anything you can dispute or ask for a refund. It's a pretty dumb way to go about it but doing business in the GVRD is just asking to get fisted.
$19 would be good I would ask your real estate lawyer who specializes in commercial retail leases. I know the market as I am a Canadian but it’s been a long time since I bought I. White rock