Best Practices for Commercial Real Estate Leasing

Best Practices for Commercial Real Estate LeasingSecuring a physical space for your business is a significant expense, and a poorly negotiated lease can negatively impact your company’s profitability. Follow these best practices to reduce unnecessary costs when leasing commercial real estate:

  1. Hire a Lawyer
  2. Involve a commercial attorney in your lease discussions. It’s essential to hire a competent business attorney familiar with leases, as opposed to a general or family attorney, to avoid unforeseen charges.
  3. Evaluate Your Business Needs
  4. Research and list the current and future space requirements for your business. Establish a budget and decide on a preferable location before entering lease negotiations.
  5. Understand Your Costs
  6. Carefully review all incidentals you are expected to pay for and ensure they fit within your budget. Clarify whether base rent or incidentals will increase in the future, and do not hesitate to request revisions.
  7. Understand Your Lease Options
  8. Lease costs can vary greatly depending on the type of lease, such as gross rent lease, net lease, double net lease, and percentage rent lease. Research the specific type of lease you are dealing with.
  9. Check Market Rents
  10. Compare the asking rent with current market rents in the area. Speak with a commercial realtor to learn about current market leasing rates. If the asking rent is too high, use this information to negotiate a lower rate.
  11. Research the Property
  12. Gather information about the property that could be useful during lease negotiations. Investigate the area’s traffic and neighboring businesses to better understand the property’s potential.

By following these best practices, you can ensure a more favorable lease agreement that supports your business’s growth and profitability.

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