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How are commercial leases different?

On Behalf of | Feb 19, 2021 | Real Estate & Development

Obtaining a commercial lease is very different from a traditional residential lease. The biggest difference may be that both parties will be actively involved in negotiating the lease. 

This means that a good negotiator can obtain significant concessions from a potential landlord in many cases. When negotiating a commercial lease, make sure to focus on the length of the lease as well as the ability to make improvements to the property. 

How long should I negotiate a lease for?

While there is no standard rule for this, it is true that landlords are more likely to make concessions to a renter who is looking for a longer lease. The majority of commercial leases are longer than the typical residential lease of one year. 

Of course, a long-term lease may not suit your needs. You also must take into consideration the location of the lease. If the location is vital to your business, it gives the landlord more negotiating power. On the other hand, if you were just looking for office space, location is probably not as important to you and you can use this as a bargaining chip. 

What about improvements?

Some landlords are willing to negotiate who will pay for any improvements to the property or what the improvements actually are. If you are looking to update the space to appeal to customers or for any other reason, make sure that you fully negotiate who is in charge of having the work performed and whether or not you will need to restore the property to its original condition when your lease is over.