Tips on Commercial Property Leasing

While starting and growing a business can be challenging, one area in which the market is currently working in the business owners’ favor is in the glut of available commercial real estate.
If your business is new or simply in need of more space, the abundance of choice and favorable market conditions for potential tenants can prove an enticing prospect for budding entrepreneurs and small business owners. However, even in a buyer’s market, negotiating a commercial lease is a daunting and complex process that requires research and due diligence.
So you’ve found your perfect location, now what? Here are some tips for leasing a space for your small business.In addition you can find commercial properties for lease here.
Setting the Term of your Lease
The term and rent that you will pay is your first negotiation point.  The trick here is not to over-commit while giving yourself some flexibility for the long term. It’s generally recommended that small businesses negotiate one to two year leases with the option to renew should you need to. You’ll also want to factor in and negotiate rent increases over the term and renewal options so that you are not unexpectedly hit with a rent increase without warning from your landlord – something that can quickly compromise you cash flow and margins.
Remember to be prepared for pushback, a landlord is much more likely to favor locking you in for the long-term if they can by sweetening the deal. It’s a good idea to have a broker involved who knows the local market and what tricks and sweeteners the landlords are likely to offer! But remember the broker works for the landlord and gets commission on the total lease value. It’s worth talking to a good real estate lawyer before consulting a broker, they can often recommend the right choice for you and work consultatively with you as you negotiate your lease through the broker.
What about Expenses?
As with residential leases, commercial real estate landlords often tag on extras such as maintenance fees, upkeep for shared facilities (Common Area Maintenance or CAM), and so on.  What about utilities? These charges are usually the responsibility of the tenant, but how are they measured? Are they individually metered or apportioned by the square footage? Ask to see these “hidden fees” and policies as well as examples of costs that are typically incurred by tenants.
Who Handles Maintenance and Repair?
While residential leasing often places the burden of maintenance and upkeep on the shoulders of the landlord, commercial leases are different. Just because the landlord owns the building, it would make sense to believe that they are responsible for repairs and upkeep – this is not the case. Commercial leases vary in their approach to this – some stipulate that the tenant is responsible for all property upkeep and repairs while others specify that the tenant is responsible for systems such as the air conditioning, plumbing , etc. Check your lease – in addition to stating who is responsible for what it may also contain dollar limits on how much the tenant must pay for maintenance and repair. An attorney can help clarify your legal rights.