How To Negotiate A Commercial Real Estate Lease

There is technically a standard agreement for commercial leases that is outlined by TAR (the Texas Association of Realtors), but if you draft a lease with your real estate attorney instead, it will give you much more leeway and allowance for detail. Your business is very likely to obtain significant agreements with your landlord, depending on how the commercial real estate market is doing. Many factors go into renting a commercial property, so there will be many factors involved in negotiating your lease. Here are some things you should try to negotiate with your landlord.

Consider Rent And Rent Increases

Before you lease your commercial property, consider the cost of rent. The cost of rent will fluctuate depending on the real estate market conditions and the location of your property. Depending on these factors, you will probably be able to negotiate the rental amount. Your lease should outline which terms are negotiable or not, and whether your landlord will pay for extra costs, such as utilities, insurance, taxes, and other expenses. Keep in mind, commercial leases often have significantly more than base rent, and they will most likely have a triple net lease as well, which outlines the proportion of taxes, insurance and utilities that the tenant would be responsible for.

Length Of The Lease

You should also attempt to negotiate the length, or term, of your commercial lease. Landlords will always try to agree with a long-term lease, because it ensures steady income and payments from you as the tenant. Unfortunately, long-term leases might not work for every business, depending on your situation. If you’re a brand new small business, for example, a long-term lease might not be ideal in case the business fails or has to relocate. Let your landlord know your situation and try to discuss other term options.

Improvements and Renovations

Lastly, it might be necessary to negotiate any improvements or renovations of the property. Your landlord will usually try to negotiate costs for any necessary enhancements of the space you need, and they will figure out who will be in charge of the renovations.

The attorneys at Sheehan Law, PLLC are experienced in real estate law, and we will able to assist you in any commercial lease issues or concerns. Contact us today so we can provide you with any necessary real estate needs.