What is a full service lease in real estate?

Full Service Lease Definition

A full-service lease, often used in commercial real estate, particularly in office buildings, is an agreement where the landlord pays for all the property's operating expenses, including utilities, maintenance, taxes, and insurance, in addition to base rent, offering a more predictable cost for tenants.

Full Service Lease Example

Imagine a small business renting office space in a downtown skyscraper under a full-service lease. The business pays a fixed monthly rent to the landlord. This rent covers not only the use of the office space but also includes all utility costs (electricity, water, heating, and air conditioning), janitorial services, building maintenance, property taxes, and building insurance. The tenant doesn't have to worry about fluctuating costs for these services, making financial planning simpler and more predictable. For example, if the monthly rent is set at $5,000, this amount remains consistent regardless of changes in utility costs or property taxes, providing a straightforward and inclusive leasing arrangement for the tenant.