Understanding and negotiating commercial real estate leases

Understanding and negotiating commercial real estate leases can be complicated and they are very different from residential leases.  Before signing any commercial lease, you need to know what questions to ask, and how rent, load fees, and other added fees are calculated.  Armed with knowledge you can negotiate the best deal possible!  Negotiating a good deal in a commercial lease starts with asking the right questions.  Once you have answers to certain questions, you can research more about types of leases, leasing terms, negotiating commercial leases You will also be better able to plan your finances, and your negotiation strategies if you know what questions to ask.  A few questions just to start:

  • What Type of Commercial Lease is Being Offered?  The type of lease being offered is probably the most important thing to consider first because it determines how you will be charged rent. The terms of commercial real estate leases are defined by the type of commercial lease.

  • Are the Terms of the Lease Negotiable?  All commercial leases should always have at least some room for negotiation, no matter how small.  A completely inflexible landlord is generally not someone you want to lease from because "inflexible" often equates with "unreasonable."

  • What Insurance Coverage Does the Lease Require Tenants to Purchase?  Few business owners new to commercial leasing will look beyond their actual monthly rent and utility costs when determining if a space is affordable, but you also need to consider your insurance costs.  Moving from a home-based business into "brick and mortar" space will cost you more to insure your business because in addition to your own insurance needs, your landlord will probably require you to purchase insurance to protect him/her as well.

We are here to help you and your clients with all aspects of the commercial real estate market. Please contact us for further assistance!

Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.