What is FSG in a lease?

FSG is an acronym for “full service gross,” which is a type of commercial lease often found in multi-tenant office buildings, and occasionally retail and industrial space.

What is the difference between NNN and FSG leases?

Full-service gross leases and triple net leases are the opposites of each other. With an FSG, the landlord ostensibly pays the tenant’s occupancy expenses, while under a NNN structure, the tenant pays all of his/her expenses. However, once you become a tenant, they’re more similar than you’ll expect.

What is FSG real estate?

FSG = Full Service Gross typically includes everything such as base rent, operating expenses (taxes, insurance, common area maintenance) janitorial service, and utilities, all bundled in one fixed rate. Tenant’s pay an estimated amount monthly along with their base rent and the actual amount is reconciled annually.

What is lease rate MG?

MG (Modified Gross) refers to a specific type of Lease where the tenant or lessee pays a defined base rental rate at the inception of the lease term but in subsequent years will pay a slightly different amount based on property taxes, common area fees (i.e. – maintenance work or exterior paint on a multi-tenant …

How much does a full service FSG lease cost?

Rents for an FSG lease may be quoted as “$30 per square foot, full-service.” Full-service leases are very straightforward and easy to understand. The tenant is responsible for paying their rent and the landlord is responsible for all other expenses and maintenance.

What does FSG stand for in commercial real estate?

This can get costly for businesses who do after hours work. Most free standing retail or industrial buildings tend to be Triple Net (NNN) leases where the Tenant is responsible for all expenses related to the property. This is outside of structural costs including taxes, insurance, common area maintenance, utilities and janitorial services.

What is a full service gross lease in real estate?

What is a Full Service Gross Lease In commercial real estate, a full service gross lease (which may also be called a full service lease, or a gross lease) is a lease agreement in which the tenant is responsible only for the base rent, while the landlord must cover the operating expenses. Now let’s go into some more detail about what that means.

Why are NNN leases better than FSG leases?

Tenants prefer NNN leases because they know that the additional rent they pay towards maintaining the common areas will be utilized properly. Landlords don’t make money off the pass-through fees, which tenants may also audit annually, so they won’t be tempted to cut costs on the quality of the maintenance of the property.