Frequently Asked Questions
Office & Warehouse Solution
1. Leasing Warehouse
Q: What are the most common lease types?
A:Industrial Gross (IG): Tenant covers most operational expenses in base rate, plus utilities, common area maintenance, and often increases in property taxes and insurance beyond the base year.
Triple Net (NNN): Tenant pays base rent, utilities, insurance, maintenance, and property taxes. Offers lower base rent but higher cost variability.
Modified Gross (MG): A hybrid structure where all costs and responsibilities are negotiated between landlord and tenant.
Q: What is the process for leasing warehouses?
A: Understand your needs
→ Get property list and quote from our team
→ Tour with our agent
→ Make offer
→ Sign contract
→ Move in.
Q: What documents should I prepare for leasing warehouses?
A: Landlords typically require at least two years of tax returns, the latest three months of bank statements, and year-to-date profit & loss statements plus balance sheets.
Q: How are rents adjusted annually?
A: Rents are typically adjusted by 3%–5% annually, depending on the landlord and market conditions. CUPS Realty will assist in negotiating the best possible rate.
Q: What is rent abatement in commercial leases?
A: A rent-free period where no rent is paid, though operating expenses continue. Duration depends on market demand—typically one month for a three-year lease, two months for a five-year lease.
Q: What is the typical deposit amount for leasing a warehouse?
A: The deposit depends on your financial statements. New companies typically pay a higher deposit, often equal to six months of base rent.
Q: What are the insurance requirements for leasing a warehouse?
A: Landlords generally require tenants to carry liability insurance to protect both parties' interests.
2. Subleasing Warehouse
Q: For sublessors, what is the process of subleasing out a warehouse?
A: Confirm subleasing is allowed in your lease
→ Notify the landlord
→ Find a sublessee
→ Draft and obtain landlord approval for the sublease agreement
→ Sign the sublease
→ Proceed with subleasing.
Q: For sublessees, what is the process of subleasing a warehouse?
A: The process is similar to direct leasing, but sublessees should be cautious of fraud. Working with an experienced team helps minimize potential risks.
Q: Why would you want to sublease a warehouse?
A: Lower Rent: Often below current market rates.
Ideal for Startups/Small Businesses: Offers variety and shorter terms with less financial pressure.
Flexible Lease Terms: Typically 1–3 years or shorter, with lower security deposits.
Q: What should be noted when subleasing a warehouse?
A: Unfavorable Terms: Have an experienced partner review both original and sublease agreements.
Uncontrollable Factors: Sublessor default could impact your occupancy.
Delays: Communication with the landlord must often go through the sublessor.
3. Buying Warehouse
Q: What documents are required when purchasing commercial properties?
A: For financing: down payment and pre-approval letter.
For cash purchases: proof of adequate funds.
Q: What is the minimum down payment for purchasing commercial properties?
A: Traditional commercial loans: 15%–35% of purchase price. SBA 7(a) or CDC/SBA 504 loans: 10%–15% of purchase price.