Today I will be sharing a template for a common legal tool for quickly and efficiently evaluating commercial leases: the Commercial Lease Abstract / Summary. This template applies to triple net office, triple net retail leases, and any type of commercial real estate lease. Essentially, this is a 2-3 page abstract which summarizes key terms in a format which allows a potential buyer to quickly compare lease terms among multiple leases or properties.
Note from Spencer: This is another post in a growing section we call ‘A.CRE Legal‘. One of Texas’ top real estate attorneys, Ronald Rohde, has graciously offered to share his time, expertise, and open his library of real estate legal templates for the A.CRE audience. Click here to learn more about Ron or to contact him directly.
Key Sections of the Lease Abstract
The specific terms usually include leased premise description, price per square foot, due diligence period, security deposit, execution date, commencement date, financial reporting obligations, parties to the lease, permitted uses, assignability, etc.
We start with clear distinctions between the Lease Effective date, Commencement date, and Rent Payment date. We want to see when the lease was signed, when possession should take place, and when rental payments are due to begin.
The Rentable Area is important to understand how large of a space or percentage of total a single occupant utilizes. These numbers will directly plug into the annual Common Area Maintenance (CAM) charge as well. It is an important verification for a property with many units to ensure that all tenants sum to 100%.
The schedule of rental rates is also important. This is a very easy display of the annual changes and it conveniently will input in to an ACRE model for rental income analysis! These calculations will verify what is commonly described as “3% increases.”
Next, you’ll notice that in my versions I include a page reference to the locations of my data. Because this is just a summary, its impossible to include all relevant details. If a client wants to read more or double-check my work, then the page references allow the client to dig further into any areas of concern.
Video Walk-through – Commercial Lease Abstract
In the following video, I walk you through my commercial lease abstract. Download the template (link below) and follow along. This video is based on v1.0 of the template document.
Download the Commercial Lease Abstract (Summary)
To make this legal template accessible to everyone, it is offered on a “Pay What You’re Able” basis with no minimum (enter $0 if you’d like) or maximum (your support helps keep the content coming – typical legal document templates sell for $100+). Just enter a price together with an email address to send the download link to, and then click ‘Continue’.
We regularly update the template (see version notes). Paid contributors to the template receive a new download link via email each time the model is updated.
- Initial release
About the A.CRE Legal Contibutor: Ronald Rohde has over ten years of legal experience with real estate transactions, leasing, and investment. He received his undergraduate degree from Cornell University and his juris doctor from the University of Miami.