33 straight answers to the questions Lake County owners, tenants, and investors actually ask — written to be quoted, whether you're reading this page or asking an AI.
Answered by Jason Bitton — #1 RE/MAX Commercial Broker in Illinois (2022, 2024, 2025) · RE/MAX Hall of Fame 2025
A leased commercial property in Lake County is valued off its income: net operating income (NOI) divided by the market cap rate. An owner-user building sold vacant is valued off recent price-per-square-foot sales of comparable buildings.
The fastest way to a real number is a Broker Opinion of Value — Jason prepares them for Lake County owners at no charge.
A BOV is a broker's written pricing analysis of your property, built from recent comparable sales, active competing listings, and the property's income and condition. It is faster and far less expensive than a formal appraisal — Jason provides BOVs free, with no obligation to list.
A cap rate is a property's net operating income divided by its price — the market's yield on the deal. The lower the cap rate, the higher the price: a building producing $100,000 of NOI is worth about $1,430,000 at a 7% cap rate but only $1,250,000 at 8%.
Buyers price risk through the cap rate, so tenant strength and remaining lease term move your value as much as the rent itself.
It depends on which buyer pool pays more for your specific building. Leased to a strong tenant, it sells as an investment priced off the income; vacant, it sells to an owner-user priced off comparable sales — and owner-users using SBA financing sometimes pay more than investors.
This is a case-by-case underwriting question, not a rule. It is one of the first things a Broker Opinion of Value settles.
Marketing time for a correctly priced Lake County property typically runs 2–3 months, followed by about two months from contract to closing for the buyer's due diligence, financing, and attorney review.
Overpricing is the single biggest cause of long marketing times — well-priced buildings draw their best offers in the first 30–60 days of exposure.
Plan for brokerage commission, title insurance, Illinois and county transfer taxes (some municipalities add a local transfer stamp), attorney fees, and a credit to the buyer for property taxes — because Illinois taxes are paid one year in arrears.
The tax proration is the number sellers most often forget, and on commercial deals it can be a five-figure swing. Ask for a written net-sheet estimate before you list.
You are not required to have one to list, but almost every commercial lender requires a Phase I Environmental Site Assessment before funding your buyer — so the property will effectively need to pass one to close.
If the building's history includes uses like automotive, dry cleaning, or manufacturing, order the Phase I early. Finding an issue during the buyer's due diligence is the most expensive time to find it.
NNN means the tenant pays base rent plus its proportional share of the property's three “nets” — real estate taxes, building insurance, and common area maintenance (CAM). A space quoted at $20/SF NNN with $8/SF of nets really costs $28 per square foot per year.
Always compare spaces on the all-in number, not the headline rate.
In a gross (full-service) lease the landlord pays the operating expenses; in a NNN lease the tenant pays them; a modified gross lease splits them — commonly the tenant pays utilities and janitorial while the landlord covers taxes and insurance.
The label matters less than the expense schedule: read exactly which costs pass through, and whether there is a base year or an expense cap.
Commercial rent is quoted as annual dollars per square foot: multiply the rate by the square footage, then divide by 12 for the monthly figure. A 2,000 SF space at $24/SF is $48,000 per year, or $4,000 per month — plus NNN charges if the lease is triple net.
As a real-world benchmark, a recent Gurnee retail tenant Jason represented signed a 5-year lease at $26/SF NNN.
About 2–7 months is the honest starting point — it moves with the submarket. The biggest drivers are rent positioning against competing space, visibility and parking, the condition of the space, and how fast the village can approve the tenant's use.
Pricing to the market on day one leases space dramatically faster than testing a high rate and chasing the market down.
A TI allowance is money the landlord contributes toward building out the tenant's space, quoted in dollars per square foot. It is one of three levers traded against each other in every lease negotiation — rate, free rent, and TI — so a bigger allowance usually means a higher face rent or a longer term.
Landlords recover TI over the life of the lease, which is why tenant credit and term length drive how much they will fund.
CAM (common area maintenance) is the tenant's share of running the property: parking lot maintenance, landscaping, snow removal, common utilities, and management. It is billed as an estimate and trued up annually.
Before signing, ask for a line-item CAM budget, the right to see the annual reconciliation, and — where you have leverage — a cap on annual increases in the controllable portion.
You can do it yourself, but a broker earns the fee in three places: exposure (syndication to CoStar, LoopNet, Crexi, the MLS, and a direct tenant network), tenant qualification before you sign, and lease structure — escalations, pass-throughs, and guaranties that protect the building's value.
A mispriced or badly structured lease costs an owner more over its term than the commission. Jason leased up the 22-unit Sky Harbor Business Park in Northbrook, then sold it for $2,250,000 (2022).
Conventional commercial loans typically require 20–30% down. If your business will occupy at least 51% of the building, SBA financing (504 or 7(a)) can cut that to roughly 10% down, with a long-term fixed rate on the SBA portion.
Pure investment purchases — no owner occupancy — sit at the higher end of the range.
An SBA 504 is a two-part loan for owner-occupied commercial real estate: a bank first mortgage for about 50% of the project, an SBA-backed CDC loan for about 40% at a long-term fixed rate, and roughly 10% down from the buyer.
It is often the cheapest way for a business to own its building. Your business must occupy at least 51% of the property to qualify.
Buying builds equity, fixes your occupancy cost, and adds tax benefits like depreciation — but it ties up capital and reduces flexibility if you outgrow the space. Leasing preserves cash and mobility at the cost of rent escalations and no upside.
The answer usually turns on how long you will stay and what else the capital could earn — run both scenarios with real numbers before deciding.
NOI is a property's income after operating expenses — rent and other income, minus taxes, insurance, maintenance, and management — but before mortgage payments and depreciation.
It is the most important number in commercial real estate because value is priced directly off it: NOI divided by cap rate equals value, so adding $10,000 of NOI adds roughly $140,000 of value at a 7% cap rate.
Due diligence is the buyer's inspection window after contract — typically 30–60 days — covering the building's physical condition, title and survey, zoning compliance, a Phase I environmental assessment, and review of any leases and estoppel certificates.
Earnest money usually goes non-refundable when the window ends, so the calendar gets negotiated as hard as the price.
An LOI is a short, mostly non-binding document that sets out the main deal terms — price, earnest money, due-diligence period, closing date — before attorneys draft the full contract. It saves both sides legal fees by confirming there is a deal worth papering.
Sign one only after the key business terms are genuinely negotiated; re-trading an LOI damages your credibility for the rest of the deal.
Most off-market deals come through broker relationships: owners who will sell at the right number but will not list, matched against qualified buyer requirements. Jason maintains active acquisition mandates and contacts owners directly on buyers' behalf.
If you are a buyer, put your criteria in writing with proof of funds — that is what gets you the first call.
Common planning benchmarks: office space runs roughly 150–250 SF per employee depending on layout; retail depends on format and sales density; industrial is driven by racking height, staging, and dock needs rather than headcount.
Walk two or three real spaces early — an hour of touring calibrates your number better than any formula.
Usually nothing out of pocket: in most Lake County deals the landlord pays the leasing commission, which is split with the tenant's broker. You get market knowledge, comparable lease data, and a negotiator on your side of the table — at the landlord's expense.
Jason represented Haraz Coffee House in Gurnee this way: a 5-year lease at $26/SF NNN, including the village parking and use approvals.
The rate is only one lever. Negotiate the TI allowance and free-rent period, renewal options at defined terms, a cap on CAM increases, assignment and sublease rights, exclusive-use protection if you are retail, and the scope of any personal guaranty.
Over a five-year term these routinely matter more than fifty cents on the rate.
A personal guaranty makes you personally liable for the lease if your business entity defaults — and yes, it is negotiable. Common limits include a burn-off that reduces the guaranty each year you pay on time, a cap at a fixed number of months' rent, or a good-guy structure that releases you if you surrender the space properly.
Never sign an unlimited guaranty without at least asking for one of these.
Often, yes. Your use must be permitted under the property's zoning; some uses need a special use permit, and parking counts, signage, and build-out permits also run through the village.
Check zoning before you sign and build approval time into your rent-commencement negotiation — Jason handled exactly this, parking and use approvals, for Haraz Coffee House in Gurnee.
Three paths: exercise a renewal option if you have one, renegotiate a new term, or hold over — which typically triggers penalty rent of 150–200% and month-to-month insecurity.
Start the conversation 9–12 months before expiration; your leverage is highest while the landlord still has time to fear a vacancy.
Two clocks start the day you close your sale: 45 calendar days to identify replacement property in writing, and 180 calendar days to close on it. Both run concurrently, include weekends and holidays, and are not extendable except by federal disaster declaration.
Missing either deadline makes the entire gain taxable.
A 1031 exchange lets you sell investment real estate and roll the proceeds into other investment real estate without paying capital gains tax now — the tax is deferred, not forgiven.
The proceeds must flow through a Qualified Intermediary (you can never touch the cash), and the replacement must be like-kind investment property — which nearly all real estate held for investment is.
Selling appreciated investment property without an exchange can trigger federal capital gains tax of up to 20%, depreciation recapture at 25%, Illinois income tax at 4.95%, and possibly the 3.8% net investment income tax — a combined bite that often exceeds 30% of the gain. A 1031 defers all of it.
Confirm your specific numbers with your CPA; the calculator gives you the framework.
Class 6B cuts a qualifying industrial property's Cook County assessment level from 25% to 10% for ten years (then 15% in year 11 and 20% in year 12), which can roughly halve the tax bill.
Real example: on Jason's $2,975,000 sale of 3000–3135 Madison St in Bellwood, Class 6B approval took about 45 days and projected taxes dropped from roughly $247,000 to roughly $112,000 per year.
Illinois has some of the highest commercial property taxes in the country, and a sale can cause the assessment to be revisited against market evidence. Every owner has the right to appeal annually to the county assessor and Board of Review, using evidence like income statements, vacancy, and comparable assessments.
On the right property, a successful appeal is worth more than a rent increase.
Illinois property taxes are paid one year in arrears — the bill you pay this year is for last year's taxes — so at closing the seller credits the buyer for taxes accrued but not yet billed.
The proration percentage (often 100–110% of the last known bill) is a negotiated contract term, and on commercial deals it can be a five-figure swing. Make sure your contract states it explicitly.
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