afrexai-lease-analyzer

name	afrexai-lease-analyzer
description	Commercial Lease Analyzer

Commercial Lease Analyzer

Analyze commercial leases (office, retail, industrial, warehouse) for hidden costs, unfavorable terms, and negotiation leverage. Use when reviewing a new lease, renegotiating a renewal, or comparing multiple lease options.

When to Use

• Signing a new commercial lease
• Lease renewal negotiation
• Comparing multiple lease proposals
• Auditing existing lease for cost reduction
• Subleasing or assignment analysis

What You Need from the User

1. Lease type: Office, retail, industrial, warehouse, mixed-use
2. Lease terms: Base rent, term length, renewal options
3. Cost structure: NNN, modified gross, full-service gross
4. Square footage: Usable vs rentable (load factor)
5. Location/market: City, submarket (for comp analysis)

Analysis Framework

1. Cost Breakdown (True Occupancy Cost)

Base Rent ($/SF/yr)
+ CAM Charges (Common Area Maintenance)
+ Property Tax Pass-Through
+ Insurance Pass-Through
+ Utility Estimates
+ Parking Costs
+ Janitorial (if not included)
= Total Occupancy Cost ($/SF/yr)
÷ 12 = Monthly Cost
× Term = Total Lease Liability

2. Load Factor Analysis

Rentable SF ÷ Usable SF = Load Factor
Industry benchmarks:
- Class A Office: 1.15-1.20 (15-20% common area)
- Class B Office: 1.12-1.18
- Retail: 1.05-1.10
- Industrial: 1.02-1.05

Flag if load factor > benchmark. Every 1% = real money.
Example: 5,000 USF at 1.20 = paying for 6,000 RSF
At $30/SF = $30,000/yr for hallways and lobbies

3. Escalation Modeling

Project total cost over full term including:

• Fixed increases: 3% annual is standard. Flag >3.5%
• CPI-linked: Model at 2.5%, 4%, 6% scenarios
• Market reset: Compare to projected market rents
• CAM escalation caps: If uncapped, model 5-8% annual increases

Output a year-by-year cost table showing base rent, estimated CAM, total cost.

4. Critical Clause Review

Red Flags (flag immediately):

• Personal guarantee without sunset clause
• Demolition clause (landlord can terminate for redevelopment)
• Radius restriction >3 miles (retail)
• Continuous operation clause without co-tenancy protection
• Uncapped CAM with no audit rights
• Relocation clause (landlord can move you)
• No assignment/sublease rights
• Holdover rate >150% of final rent

Yellow Flags (negotiate):

• No rent abatement for construction delays
• No exclusive use clause (retail)
• HVAC maintenance fully on tenant
• No cap on controllable operating expenses
• Restoration clause requiring original condition
• No early termination option after year 3-5
• Insurance requirements above standard

Green (Standard/Favorable):

• TI allowance ($30-60/SF office, $15-30 retail)
• Free rent period (1 month per year of term)
• Right of first refusal on adjacent space
• Renewal option at fair market value
• CAM audit rights
• Assignment rights with reasonable consent

5. Negotiation Leverage Points

Based on market conditions, identify:

• Tenant's market (vacancy >15%): Push for higher TI, more free rent, lower escalations
• Landlord's market (vacancy <8%): Focus on caps, flexibility clauses, termination rights
• Balanced (8-15%): Standard negotiations, pick 3-4 priorities

Rank negotiation items by dollar impact over lease term.

6. Comparison Matrix (Multiple Options)

If comparing leases, output a side-by-side table:

Factor	Option A	Option B	Option C
Effective Rent ($/SF)
Total 5-Year Cost
TI Allowance
Free Rent (months)
Escalation Type/Rate
Termination Option
Load Factor
Parking Ratio

7. Financial Impact Summary

• Total lease liability (ASC 842 / IFRS 16)
• NPV of all lease payments (discount at 6-8%)
• Break-even occupancy cost per employee
• Cost per revenue dollar (if revenue data provided)

Output Format

LEASE ANALYSIS: [Property Address]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

VERDICT: [FAVORABLE / NEGOTIATE / WALK AWAY]

TRUE COST
Monthly: $XX,XXX
Annual: $XXX,XXX
Full Term: $X,XXX,XXX
Per Employee: $X,XXX/mo (at XX headcount)

RED FLAGS: [count]
[List with dollar impact]

TOP 3 NEGOTIATION PRIORITIES:
1. [Item] — potential savings: $XX,XXX over term
2. [Item] — potential savings: $XX,XXX over term
3. [Item] — potential savings: $XX,XXX over term

YEAR-BY-YEAR PROJECTION:
[Table]

Industry Benchmarks (2025-2026)

Market	Office ($/SF)	Retail ($/SF)	Industrial ($/SF)
NYC	$65-85	$80-200+	$18-25
SF/Bay	$55-75	$45-80	$15-22
LA	$40-55	$35-65	$14-20
Chicago	$28-42	$25-50	$8-12
Dallas	$25-38	$22-40	$6-10
Miami	$42-58	$40-75	$12-16
Atlanta	$25-35	$20-38	$6-9
Denver	$28-40	$22-38	$8-12
Austin	$35-48	$28-45	$10-14
National Avg	$32-45	$25-45	$8-14

TI allowances: $30-60/SF (office), $15-30/SF (retail), $5-15/SF (industrial) Free rent: 1 month per year of term is standard in balanced markets

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