Lease Template – Hannan House
Standard Lease – Children and Family Services Center
Standard Lease – MarinSpace
Sublease Agreement – E4C
Subleasing Office Services – Tides/Thoreau Center
License Agreement – Plantory
Short Term License Agreement – East Bay Asian Local Development Corporation
From an Ask-NCN Conversation, 1/7/16
Max Scharfenberger, Jerry Forbes Centre Foundation, 1/7/16
A question has been posed to me by our team.
We will have a warehouse which will have both space that is leased long term (5 years or more) and we have requests for short term (seasonal) leases (could be as short as a month and as long as 6 months). We have a rate for the long term leased space but are undecided about the short term leased space.
Does anyone have experience with charging a premium or a surcharge on the short term leased space.
Our thinking is to leaning towards charging a surcharge since we cannot be guaranteed revenue from this space for the full year. We think that we can fill the space about 80-90% of the year.
Any advice would be greatly appreciated.
Manager Facility Commissioning
James Thomson, New Path Foundation, 1/7/16
Currently for any group leasing space shorter than the standard terms or requiring part/time usage, we do charge a premium as our experience has shown that there is often difficulty filling the remaining space (due to scheduling or timing of when it is vacant). As our rent charge is based on sq/ft of leased space plus any applicable MITU (Maintenance, Insurance, Taxes and Utilities) and common roof charges (pro-rated by amount of leased space), short term leases usually have an additional amount added to the sq/ft lease portion…the other charges stay the same.
Dustin Barrington, HNS Life Center, 1/7/16
We charge a small premium that covers our projected vacancy based on our projected annual expenses.
Robert Zeidler, The Cotton Factory, 1/7/16
That depends on how you look at it. If the space is challenged (i.e. no windows, odd shape, etc.) you may offer it as a big discount to get it rented. If they only want part of the space, what are they leaving behind? Is that rentable? Will you need to build partition walls, install electricity or plumbing, or other costly items?
My advise would be to look at what your long-term vision is for the space is. Does this new short-term lease match it (in terms of subdividing the unit, spending money on improvements, etc.). If it does, move forward. If not, it is better sitting vacant.
While a landlord will normally charge a premium for a short rental, you make look at putting it on the market at a discount to get someone in until you can find a long-term match.
Kerry-Lynn Wilkie, Langs @ Cambridge and North Dumfries, 1/7/16
We also charge a premium rate for those requesting a 1-2 year lease of one day or two days a week vs the full week. This rate was determined by taking the total annual lease rate (which includes common fees and business services fees) of the office and dividing by three. The reason being is that we can most likely lease an office 3 days a week with agencies interested in a lease of 1 or 2 days per week.
Not many agencies would be interested in leasing only a Friday – which has an impact on revenue. In taking this approach, we have been able to fill a shared office up to 4 days per week with up to 4 leasing ½ day per week up to 2 days per week. It is first come first served on the choice/availability of days in this shared office space.
Follow-up Discussion on 4/21/16
Max Scharfenberger, 4/21/16
Does anyone have any experience with offering short term leases for offices?
We are currently space planning and have an area that would possibly work for some short term rental office space. We are planning a number of hot desks but some of our research in the for profit world shows that a number of them have offices that can be rented for a little as a day and as long as a month or two.
Any insight would be appreciated.
Alan Ziter, NTC Foundation
There have been numerous opportunities to lease unoccupied office and studio space for short term. Usually it is for an existing tenant that needs short term space, a nearby project that is building out their space in the neighborhood but needs office space in the interim (ie a hotel management team for a hotel under construction)
Here is some information that may be helpful:
- The benefit of doing these short term leases is only for spaces that you do not anticipate finding a long term tenant for the space so as to cover your operating costs and bring in unanticipated rent. Sometimes this is hard to determine as your dream tenant could show up tomorrow and you’ve locked up a space short term that you could have leased long term.
- Don’t let the user make significant changes to the space that will have to be reversed at the end of tenancy.
- We use a Venue Use Agreement rather than a lease. We usually include all the pass through expenses (utilities, property taxes, CAM) into a single monthly amount.
- Include a damage deposit in the VUA
Let me know if you want to talk offline about this.
May Mui, East Bay Asian Local Development Corporation
We use a License Agreement for temporary and short term usage of our commercial spaces. Here is a copy. Hope this help you.
*See Short Term License Agreement link at top of the page*
From an Ask-NCN Discussion, 9/10/13
Mary Jo Dike, COO, Foundation for a Healthier Kentucky, 9/10/13
Does anyone offer full service lease arrangements? For example, furnished offices or workstations with either included/or options for IT, telephone and various other amenities. If so, would you be willing to share your pricing structure? I know there are a million variables that can affect price, but it would be great to see how others have considered these types of arrangements.
Bruce Demartini, Thoreau Center for Sustainability San Francisco, 9/10/13
Tides, the master lease holder for the Thoreau Center, subleases its internal office spaces. We describe the spaces as executive suites with a total square footage of around 200 for $900/mo. Remember, this is San Francisco so this probably isn’t going to help you much with comparisons, but I’ve attached in this email the office services that are included in the rent; maybe that may help you.
*See Subleasing Office Services document at the top of the page.*
Katie Edwards, Nonprofit Centers Network, 9/11/13
Just a question for clarification purposes: Are you interested in hearing from folks with co-working models that provide all-inclusive drop-in space that use a membership model? In these situations, usually more than one person uses a particular desk or workstation. Or are you interested in more traditional office spaces with more typical lease or licensing arrangements with one designated space per user or organization? Perhaps both perspectives would be useful?
Let us know!
Both, Please! We are looking at doing a combination of “executive suite” type offices, drop-in space and project space with a design that fosters collaboration.
Jody Ensign, Third Street Center, 9/12/13
This must be the season for rethinking shared conference spaces and recreating mixed use performance spaces, as we at Third Street Center are doing the same thing. So all of the attachments and ideas have been very valuable.
First, we have three common rooms available free of charge to our tenants and a minimal fee of $10 – 25 per hour for other outside nonprofits. We also make them available for large private events such as parties and weddings at a higher rate of $50 per hour but with a $750 cleaning/damage deposit. After three years of very comfortable working relations, tenants have raised the question of some tenants using the common spaces more often and for larger events, not just meetings. The question was raised asking if these heavier users pay more so that our Common Area Maintenance fee that all tenants are charged equally, does not go up for cleaning and repairs. After much deliberation by all tenants it was agreed to not charge for the number of usage, but to charge $75 for events which have 75 people or more, to cover extra cleaning, wear and tear and bathroom supplies. So far this is working well and tenants are happy, but I do like the suggestion of charging for more than 10 hours of bookings per month. Will keep this in mind if the problem is raised again. All our rooms have free WiFi, conferencing equipment and one room has A/V equipment. We do have white boards to use and 15 large tables and 100 chairs.
And we also have a 4,400 sf multi-purpose/ performing space that one organization rents, made minimal improvements to the old gym space, and then books concerts and various events. We are now taking another look at how to manage this space as we feel it is underutilized and the tenant is having difficulty paying the rent.
We are thinking, for a wide variety of reasons, that perhaps this large of a space should have a lower rental rate than the smaller, more traditional office spaces we have. We are also looking at the possibility of Third Street Center managing the space and the current tenant could just book the space whenever he presents a concert.
Currently the nonprofit rental rate for the space is $300 per day or night, then extra charges for lighting and sound, necessary for productions. Large events such as private parties are charged $500 plus cleaning and any extras mentioned. If it is managed by TSC, we may have a lower rental rate of $150 for TSC tenants.
We are struggling with a workable operating system that allows for concerts at night but then transforms easily into a day time use for children’s drop in center, exercise classes, conferences, etc. Daytime and night time uses are not very complementary. Any thoughts?
And, if we hire a separate person to book outside events to keep it heavily used and as a revenue generator for TSC, do we begin by paying on a percentage of bookings, a salary, or combination? Again, any thoughts are appreciated.
From an Ask-NCN Discussion May 24, 2016
Melissa Graves, Graceful Growing Together
Have nonprofit centers typically used lease templates or found pro bono legal support to create leases with tenants (especially with one or more larger anchor tenants) or is this typically a document for which centers have opted to use paid legal counsel?
Shelby Fox, Knight Nonprofit Center
We use lease templates that were created originally by lawyers that were on our board of directors so it was pro bono. If things stray from the template they will review it but we have never had to pay for legal counsel with contracts. I highly recommend having lawyers on your board it is very helpful.
Pam Mauk, Together Center
Our lease was developed by the lawyers attached to many of our nonprofit tenants years ago, along with an attorney on our board. After I became more familiar with leases I realized that it is pretty close to any template one would get anywhere, other than we reference our campus association of agencies in one section. We do update it at times with the help of a pro bono attorney.
Diana Higuera, Aurora Welcome Center
We used pro-bono legal counseling.
Kameron Hodgens, Glasser Schoenbaum Human Services Center
Our original lease was done with pro bono legal services but subsequent updates have been from a mix of pro bono and paid legal counsel.
Dustin Barrington, HNS Life Center
We borrowed another Center’s lease, modified it to our context and then had a lawyer look it over.
Peter Barrett, Ukiah United Methodist Church
Our new Nonprofit Center in Northern CA uses a Commercial Property Management firm to sit down with our new tenants and review all the lease terms. The lease is a standard template approved by the California Association of Realtors. This has worked great. They know all the legal ins and outs. They are very affordable. No lawyers are needed.
Karen Maciorowski, CT Community Nonprofit Alliance
We utilized the Pro Bono Partnership, a 501c3 group of lawyers across some of the largest firms that donate their time. Pro Bono connects legal hours with nonprofits. We utilized them to develop the entire nonprofit center, over $150,000 in legal costs at no price. Amazing team. I know they serve NY, CT, RI, but I wonder if they have a similar model in other states under a different name. Can’t imagine they are the only ones working on this service model. The National Council of Nonprofits might know.
Kim Jones, The Nonprofit Village
Nonprofit Village has lawyers on our board, but we have a separate real estate/land use firm as our pro bono counsel. Our original sub-tenant lease was designed by our landlord and was flawed in many ways. We used our counsel to renegotiate the master lease and designed a new subtenant lease that we now use. It directly correlates to some of the unique factors in our shared space. Some of the terms have been lifted from other shared space leases/templates, but we shared those with the legal team and they designed specifically for us. Just like any in-kind work that you would typically pay for, I also suggest you get a report/invoice of the hours spent over the year and have it reflected on your balance sheet.
Judy Lind, Kukui Children’s Foundation
We use a lease provided by our property manager and modified to our particular needs by an attorney on our board.
Additionally, I am attaching our Collaboration Agreement which is part of our lease. It saves a lot of problems going forward to have something like this in writing.