7 Crucial Tips for Leasing Commercial Property
January 14, 2019
Leasing commercial properties can be a lucrative deal if completed properly, ensuring both you as the tenant and the landlord benefit from the deal. It’s handy to keep in mind certain tips for leasing commercial property.
Negotiating the commercial lease is the lengthiest and most important process of leasing commercial properties, and it’s vital to keep in mind other factors that can be overlooked in a lease. You should always consult a commercial broker to assist you as a tenant representative. They will be able to guide you through the process.
#1 Calculate All Of Your Costs
Calculate All Your Costs. Calculating your leasing rates for commercial properties involves more than just the cost for rent. It’s important to be mindful of any taxes or fees that will be charged, or maintenance needs that you as the tenant will require while occupying your commercial space.
#2 Always Review the Contract
This is a legally binding agreement. One should always have legal documents reviewed by a lawyer. In regards to a commercial lease contract, the review should be performed by a lawyer that specializes in commercial real estate law and has handled lease reviews frequently.
#3 Learn the Definitions of Lease Options
Be sure you understand and know the difference between a gross rent lease, modified gross lease, or even a triple net lease and how these rates are applied in your proposed commercial lease.
#4 Consider the Length of Lease Terms
The standard commercial lease term is between three to five years. Longer lease terms may be beneficial if you as the tenant need to spread out the expense of tenant Improvements paid for by the landlord that need to be reimbursed to the landlord. This will provide a longer period to pay this expense back.
#5 Compare Market Rates
Review all surrounding similar properties and be aware of what they are charging per square footage of usable space. This will help you negotiate the rates for your space accordingly and give you an idea of how much wiggle room you have when it comes to negotiating.
#6 Research Surrounding Properties
In an ideal world, your first lead is the right fit for your commercial space. However, this is rarely the case. Know your own business needs and match the property to these needs, including location, neighboring businesses, and proximity to major highways.
#7 Don’t Forget Renewal Terms
Decide if you want to set up the lease so that you have a built-in option to renew the lease. With an option, you can decide to stay or go but it will ensure that you have this choice.
It’s always important to have a second set of eyes when leasing your commercial property, and the professionals at Investment Realty are experienced brokers with decades of real estate investing experience.
Contact one of our advisors today for assistance in leasing commercial property.