New York has a reputation for having a high cost of living. This can be seen in restaurants, nail salons, apartment prices, and whatever else you can think of. Another area that is expensive is commercial real estate. When you’re looking for a commercial lease, there are different factors that are considered in the price: market, submarket, class of building (A,B,or C), and the type of space you’re looking for. (Related topics: housing lawyer in NYC, real estate lawyer NYC)
When business owners are looking, they also have to ask themselves whether they want to buy or lease the space. If you decide to lease the property, it means that you are renting it from the owner for a short- or long-term lease. The advantages of this is that you may not have the money to buy a commercial property right now, you don’t know how successful your new company will be, and you can test out if the area is right for your business.
When you find the perfect space, you will need to sign a commercial lease. In this lease, there are different things to negotiate, such as renewal, price of rent, and common elements, to name a few. Another thing to consider is the taxes you will have to pay as a commercial tenant. When it comes to taxes, the amount that you have to pay depends on the assessed value of the building. As with any building, if the owner does substantial work on the building or if the building goes from empty to fully leased, it will increase the value of the building. Therefore, this means the tenants taxes will also increase. If you run a non-profit business, however, you are exempt from these taxes.
The base year is the amount of taxes that the property has in the first year that you are there. If there is an increase in taxes in the following year, you will pay your proportionate share of the amount that was increased. If you are sharing the property with the owner or other tenants, your share is your square footage divided by the building’s total square footage. For example, if the base tax was $50,000 but the next year it increased to $60,000, then it increased by $10,000. If you only occupy 10% of the space, then you have to pay 10% of 10,000, which is $1,000.
This is just an introduction to the taxes that you will have to pay as a commercial tenant in New York City. To learn more, ask our New York real estate attorney. Our New York real estate attorney will negotiate your commercial lease so that you get the best deal possible.