LEASE TERM: The lease term is the length of the lease. A longer lease generally allows us provide a lower lease rate.
LEASE RATE: The lease rate is the dollar amount your organization pays for rent. It is usually expressed as either cost per month, or cost per year. The main factors that affect a lease rate are the location and features of the suite, the credit history and stability of the tenant, the extent of tenant improvements, if any, and how many hours an organization will require in the shared conference room.
SECURITY DEPOSIT: 1ST month’s rent and deposit equal to first month’s rent due at signing. Because they are held in different accounts, please make the deposit check to 618 NW Glisan, LLC. The first month’s rent, as well as rent due in subsequent months, is paid to MotiveSpace.
UTILITIES & OPERATING EXPENSES: The cost of internet is included in the Barn’s Shared Suites, with other tenants responsible for their own Internet and Phone Service. Because the lease is a “gross modified” lease, tenants may be asked to share in a pro rata portion of an increase in operating costs, if any occur after their first year.
LEASE ESCALATORS: There are two things that affect the building’s lease rate over the course of a lease. The first is an industry standard 3% annual increase that covers inflation. This helps ensure that neither MotiveSpace or the Schlesinger’s lose money as general costs of business increases.
The first year of lease constitutes the “base year” during which tenants are not responsible for their share of any operating expenses. For years after the base year the base rate may be adjusted if the cost of operating expenses has increased. The Schlesinger family owns multiple historic buildings in Portland and have informed us that if this happens it is not significant, and has never created a hardship for tenants. Water/electricity costs increase somewhat every year but they’ve never seen more than 5%, which would translate into a rate increase of less than 1% or approximately $5/year for an average lease. Nonprofits in particular are insulated from increases in operating costs, because property taxes represent the largest share of operating costs for a building.
The Barn is already offering space at approximately 20% below market value for comparable buildings in the area. The annual increase in lease rate is less than the anticipated increases in property values, so it will be further below market every year. Because the Barn lease rates are quite low, it is especially important that we include these provisions.