Are you looking for commercial space?

Renting a commercial property is not as simple as leasing a residential space. There are more terms involved. If you think you cannot negotiate a commercial lease or need guidance, this article is for you. Read on for tips on negotiating commercial leases.

negotiating commercial leases

1. You Can Submit a Counter Offer

While most of the contracts can turn out to be non-negotiable, in commercial leasing, you are expected to negotiate. It is not uncommon for commercial landlords to raise the prices expecting the potential tenant to submit a counteroffer.

You should always submit a counter offer in writing, so, later on, it is clear what terms were agreed on and which were not.

Some things you might consider negotiating are the length of the lease, the condition of the property and the occupancy date.

2. The Term Length

Before you begin your search for commercial space, you should know negotiating commercial leases is not like negotiating residential leases.

The terms of the lease should be based on the goals of your business. The last thing you want is to make the lease too short and have to move before you are ready, which will create added expenses.

On the other hand, start-ups and fast-growing businesses should consider shorter lease terms to allow the business to expand more easily when necessary.

3. You Should Have an Exit Strategy

Paying attention to exit strategies is especially important to for newer businesses. Often a business only considers its immediate needs and does not negotiate for unexpected future developments

An exit strategy should be put in place to protect the business should their finances or circumstances change. It is difficult to get out of a lease before the term is over. Any lease exit strategy will depend on the market norms.

For example, businesses that require permits and licenses to operate find it easier to cancel their lease if they fail to get all the permits required to run their business.

4. Ask for Improvements

Even though you are only leasing the property, you are still allowed to ask the landlord for improvements. The landlord might agree to perform the improvements if it adds long-term value to their property or the space is hard to rent or has been empty for some time.

Know that the landlord might want to get their investment back sooner, though. They might find a way to add extra fees or increase the rent.

If a buildout takes place, be careful the landlord does not expect you to restore everything to the original layout when the lease is up. Taking the space back to original condition can be costly.

5. Do Your Homework

Before agreeing to the terms and signing a commercial lease, ensure you do your homework. Research comparable commercial properties in the area and see the rent that they are asking for.

Do not just compare based on price. Make sure you check for similar location, amenities, fees and lease terms.

This is also important when you want to renew your lease, and the landlord wants to increase your rent.

Ready To Start Negotiating Commercial Leases?

With rent being a large portion of business expenses, you want to make sure you get the most out of it. The best way to do this is by negotiating and knowing all of your options.

A second pair of eyes to look over a contract can be a big help in understanding a commercial lease. Contact us and (925) 463-9000 and let Lisa Wills, Law Offices of Lisa Wills help you.

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