What Is Key Money?

In some commercial real estate deals, the landlord asks for “key money”.?

Basically, there is something already of value in place in the space.

The example in this video is a former restaurant space, what we call a second generation restaurant space.?

The landlord here is asking for key money, meaning the new tenant coming in.

What the landlord is looking for is for the new tenant to pay an initial upfront fee, known as key money for keys for this space, and they're able to use and take advantage of all the infrastructure already in place as you see behind me.?

In this example the new tenant will pay for key money plus whatever the rent is for the space.

That is what is known as “key money” in commercial real estate.

Your Authority in Commercial Real Estate,

Otto Sevilla

Otto Sevilla?is an advisor, investor, and entrepreneur. He has been a dynamic participant in the real estate and finance industry for over 16 years. His knowledge of site selection, leasing, development, investment, acquisition, and acumen in negotiating complex commercial real estate transactions have distinguished him in the field. He has advised local, national, and international companies as well as property owners alike on developing and executing their strategic real estate plans. He has been involved with over $400 million dollars worth of assets and successfully represents more than 1 million square feet of commercial property space. Contact him at 240–706–7584 and [email protected].