When leasing commercial real estate, one of the biggest mistakes people make is committing to a lease without understanding the terms.

The most common types of lease agreements and terms include:

Unlike residential real estate, commercial leases do not follow standard terms. Tenants are responsible for negotiating the terms of their lease agreements.

Tips to consider when negotiating a lease:

• Protect your interests by hiring professionals. A commercial real estate broker can help negotiate your lease terms, including the addition of certain clauses like early-termination terms, sublease rules and assignability (transferring your lease to someone else). Have a real estate attorney review your lease before you sign it.
• Understand costs and fees up front. Most leasing costs are calculated per square foot. However, depending on the type of lease you have, additional costs—like property taxes, insurance, utilities, trash collection and CAM costs for shared areas like courtyards and entryways—might be included.
• Find out what amenities are included. Amenities can make a big difference in what location you choose to lease. Ask about basic amenities (like wiring for high-speed Internet, shared versus private bathrooms and central air) or unique bonuses (like fitness rooms, special partner discounts and security systems).
• Negotiate the length of your lease. Landlords typically favor longer lease agreements, but shorter, 1- to 2-year leases with options to renew give tenants the flexibility to reevaluate how things are going financially after their leases are over. Consider your company’s future growth, and find out your options for expanding in that location.
• Discuss signage rules. Ask what rules and options are in place for your business signage.
• Know that you’ll likely have to sign a personal guarantee. Most landlords will do a personal finance check and require tenants to sign a personal guarantee, saying they are liable if the business isn’t able to pay the rent.

Amata Realty Group can help!

If you’re searching for a new space, expanding or renegotiating a contract, contact Amata Realty Group. Amata Realty Group uses its market expertise to match tenants with office spaces and services that meet their needs. Don’t hesitate to contact us when you need help!

Sources

• http://fitsmallbusiness.com/commercial-real-estate/ https://www.allbusiness.com/what-to-know-before-you-sign-a-commercial-real-estate-lease-1412-1.html
• https://www.thebalance.com/before-signing-commercial-lease-398074
• https://www.sba.gov/starting-business/choose-your-business-location-equipment/leasing-commercial-space
• http://www.forbes.com/sites/groupthink/2015/06/02/negotiating-a-commercial-lease-heres-what-you-need-to-know/#15c6b2f9606d
• http://www.nolo.com/legal-encyclopedia/clb-how-commercial-real-estate-brokers-work.html