Crucial Tips To Help You Negotiate A Good Commercial Lease

A commercial lease is a legally-binding contract; you have no option but to obey the terms of the lease once you sign it. That is why it's important to negotiate the lease to your advantage before signing it. Here are a few helpful tips to use during the negotiations.

Measure the Square Footage

Commercial space is typically charged per square footage. Thus, you should confirm that the area you want to lease is a big as the landlord is claiming it to be. Also, the standard practice is to pay for the usable area, and not the size of the whole building. You don't want to pay for 10,000 square feet when the usable area is only 9,500 square feet. A discrepancy may arise, for example, if the previous tenant had modified the space and reduced its usable area.

Know What You Need

Know what you need, what you can compromise on, and what you don't really care for before the negotiations begin. Don't forget that the landlord is looking to maximize their revenue from the building, which means they may charge you things you don't actually need. For example, the landlord may offer you freight elevator service outside regular work hours if you don't negotiate the rent. However, if you don't need the service, it's best for you to reject it and ask for a lower rent.

Negotiate Everything

When negotiating a lease, the rent might seem like the most important thing, but it is not the only one. Everything on the lease is negotiable; try to get the best possible offer on everything. For example, you can negotiate the lease term, the incentives, the common area maintenance (CAM) expenses, and the termination clause and fee, among other aspects of the lease.

Understand the Market Rates

It is difficult to negotiate on something if you don't know its fair market value. Therefore, you should know what the going rate is for the area before you start the negotiations. Note that you should only compare your lease to similar properties rented by similar businesses in the area since rent sometimes depends on the type of business. You may need the help of a real estate professional, such as an agent or broker, to help you with the comparisons.

Hopefully, the above tips will help you secure a good lease for your business. Don't forget to use a real estate agent with experience in commercial properties to boost your chances of success.