What is effective rent and how do I calculate it?

Effective rent is your average real cost per year after concessions and escalations: total base rent, minus free rent and TI, divided by the lease years.

Effective rent is the true average rent you pay over the full term, after concessions like free rent and tenant improvement allowances and after escalations are counted.

To calculate it, add up the base rent for every year of the term (applying the escalation schedule), subtract the value of any free rent and the TI allowance, then divide by the number of years. For the most accurate comparison, discount those figures to present value. Effective rent matters because the headline rate hides both concessions and future increases: a higher quoted rate with strong concessions can have a lower effective rent than a low flat rate. It is the only number that compares two proposals honestly.

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What is the load factor and is 20% too high?

The load factor adds a share of common areas to your usable space. It typically runs 10 to 20%, so 20% is at the high end but not automatically bad.

How much free rent should I get on a commercial lease?

Enough to cover your buildout period at minimum, so you are not paying rent on space under construction. More free rent directly lowers your effective rent.

What is a good escalation rate for a commercial lease?

Around 3% a year is common. It compounds fast: 3% reaches about a 30% increase by year ten, and 4% nearly doubles the rent over fifteen years.

What happens to my lease if I sell my practice?

The buyer usually needs to take over the lease via assignment. A recapture clause can block that by letting the landlord take the space back instead.

Can my landlord move my business to another unit in the building?

Only if your lease has a relocation clause. For a practice with a fixed patient base and custom buildout, narrow it heavily or negotiate it out.

What is a base year in a modified gross lease?

The base year sets the operating-expense level the landlord covers. In later years you pay your share of increases above it, so a low base year costs you more.

How much tenant improvement allowance should I ask for on a medical office?

Aim to cover most of your buildout. Medical buildouts run $150 to $350 per square foot, so benchmark against medical deals, not a standard office figure.

Is a $28 NNN lease cheaper than a $36 gross lease?

Not necessarily. Once you add NNN pass-throughs, a $28 NNN space can cost more than a $36 gross lease where the landlord covers those costs.

How much does NNN add to base rent?

NNN charges commonly add $8 to $12 per square foot, often 40 to 60% of the base rent, so a low quoted rate can nearly double once you add them.

What happens to my lease if my landlord loses the building?

Without protection, a foreclosure can void your lease. An SNDA with a non-disturbance clause lets you stay under your existing lease if the landlord defaults.

What are my options if I need to get out of my lease early?

Depending on your lease, you may be able to sublease, assign the lease, or negotiate an early termination — largely set by what you negotiated up front.

Can I open a medical or dental practice in any commercial space?

No. Zoning determines whether a clinical use is allowed. Retail and industrial spaces often require a special use permit or variance for medical use.

Will I be personally liable if my practice can't pay the lease?

If you sign a personal guaranty, yes — your personal assets are at risk. But it can often be limited via a good-guy clause, burn-off, or dollar cap.

Can my landlord rent nearby space to a competitor?

Not if you negotiate an exclusivity clause. It stops the landlord from leasing other space in the property to competing uses — a key protection.

What is an SBA 504 loan and how much down payment does it require?

An SBA 504 loan is a government-backed program that lets owner-occupant practices buy their building with about 10% down, versus 20–25% conventional.

Why do I pay rent on more square footage than I actually use?

Rent is charged on rentable square footage, which adds a share of common areas. The load factor can make two identical rents cost very different amounts.

What are CAM charges and how do NNN leases work?

In an NNN lease, you pay base rent plus your share of property taxes, insurance, and common area maintenance (CAM), raising your true occupancy cost.

What is a tenant improvement allowance and how much can I negotiate?

A tenant improvement allowance is money the landlord contributes toward customizing your space. Amounts vary by term, market, and use.

What should multi-location operators consider before expanding into West Loop?

Multi-location operators should evaluate West Loop within a broader portfolio strategy, not as a standalone expansion decision.

How does tenant representation protect operators leasing space in West Loop?

Tenant representation helps operators negotiate lease terms that reduce risk, control costs, and preserve long-term flexibility in West Loop.

Do you assist with property purchases?

Yes. Buyer representation includes acquisition analysis, lease-vs-buy evaluation, and negotiation.

What is Flex Advisory?

Flex Advisory supports businesses needing adaptable footprints or uncertain growth trajectories.

Can you compare multiple markets or suburbs?

Yes. We provide side-by-side market comparisons including rent, incentives, and operational fit.

How does site selection work?

We evaluate demographics, zoning, visibility, access, competition, and long-term growth to identify the best locations.

Do you handle lease negotiations directly?

Yes. We negotiate directly with landlords and their brokers to secure favorable terms and reduce long-term risk.

What does tenant representation include?

Site selection, market analysis, lease negotiations, financial modeling, and long-term occupancy planning.

Is this advisory suitable for new practices or only established dentists?

We support first-time practice owners selecting their initial location, also established dentists relocating, expanding, or renegotiating existing leases.

Can you help with lease negotiations and buildout risk?

We structure and negotiate lease terms to protect dentists from excessive buildout costs, unfavorable renewal clauses, and exit limitations.

How is dental real estate different from standard office space?

Dental spaces require specialized infrastructure—plumbing, power, HVAC, ceiling heights, and medical-use compliance.

When should a dentist engage real estate advisory?

Ideally before touring spaces or discussing lease terms, when options and leverage are highest.

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What to expect:

Tenant & owner occupied representation
Healthcare & service-focused
Chicago & suburban markets

What is effective rent and how do I calculate it?

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