That ‘great deal’ on rent might not be so great once you uncover the hidden costs buried in your lease.

When tenants sign a commercial lease, the focus often falls on the base rent – the “headline” number. But in reality, there’s more to the cost of occupying a space than meets the eye. Hidden expenses, often buried in fine print, can significantly impact a tenants bottom line. 

Below, we break down the most common costs that sneak up on tenants – and how to avoid these costly surprises.

Common Area Maintenance Charges 

These charges are among the most common unexpected costs for tenants. These fees cover the upkeep of shared spaces such as parking lots, landscaping, and building security. 

While the idea sounds straight forward, Common area maintenance chargers can fluctuate year to year depending on vendor contracts, seasonal expenses, and property upgrades. Tenants who don’t understand how these charges are calculated can be caught off guard by large increases. 

Utilities and Operating Expenses

Many leases make tenants responsible for their own utilities – electricity, heating, cooling, and water – even in shared buildings. In some cases, tenants also share in operating expenses like janitorial services or trash removed. 

These costs can add up quickly, and they’re rarely included in the “per square foot” rent figure that tenants see during negotiations. 

Insurance Requirements

Tenants are often required to carry specific types of insurance, such as property coverage, general liability, and various others depending on the location and type of building. While this protects both the landlord and the tenants, its premiums can be higher than expected. 

It’s not uncommon for lease language to require more coverage than a tenant might otherwise purchase, leading to higher monthly costs. 

Property Tax-Pass Throughs

In many commercial leases, landlords pass along property tax expenses to tenants. If the property value increases or local tax rates rise, so will the tenant’s portion of the bill. 

This cost is especially tricky because tenants rarely have control over local tax changes. Without careful review, a lease can leave tenants exposed to unpredictable annual hikes

Bottom Line: Read the Fine Print

The most expensive part of a lease isn’t always the rent – it’s the terms you didn’t notice at first. By understanding the full scope of your obligations, you can budget accurately and avoid surprises. 

Thinking about signing a commercial lease? Our team can review the terms, explain every cost, and make sure you know exactly what you’re paying for. 

Scott Naasz

Chief Executive Officer | Broker | Owner
North Star Commercial Real Estate Advisors | eXp Commercial