Tenants often ask how much New Jersey lab space costs. When inquiring about the cost to lease, there are several components that make up the pricing. Ideally, you want to calculate a “gross number” comprised of base rent plus all other cost components of occupancy. This is especially important when comparing different options in different buildings or locations. These different components include a base rental rate number, plus additional expenses for common area maintenance, insurance, real estate taxes and utilities.
How rental rates are quoted
The structure of breaking the rent into several components is referred to as “triple net.” This means the tenant will pay real estate taxes, common area maintenance and insurance prorated for the space they occupy in addition to the base rental rate.
Another method of quoting rental rates for space is referred to as “modified gross.” This means some of the additional rental expenses are added to the quoted base rental rate.
An additional important consideration is whether there are any rental rate increases over the course of the lease term. The base rent can be a fixed number for the entire term or it can increase annually.
Additional rent
Understanding how the annual increases are structured for each of the components that make up additional rent is important. Common area maintenance may increase based on an agreed upon annual percentage of 2% or 3%, for example. Or, it can increase/fluctuate based on actual annual costs to maintain the building, and then divided among tenants in that building.
Other factors affecting total occupancy cost may be influenced by whether the lab space has its own HVAC system, or if the tenant will pay a pro rata share of a system that either serves the entire building or a portion of it. If utilities are not separately metered or dedicated to each tenant’s space, their cost may also increase annually.
Estimated costs to lease lab space in New Jersey
Current base rental rates may vary from the low teens to mid to high $30’s per square foot triple net on an annual basis (exclusive of additional costs discussed above). Rates depend on the condition and existing infrastructure of the individual space, desirability of the building’s location, and the specific point in time. Again, additional rent and utilities may also vary and should be understood prior to selecting a space to occupy.
These are very rough guidelines and should be further addressed with each opportunity. All costs are very individual and will vary based on many factors.