What to consider when negotiating a commercial real estate lease

| Apr 24, 2020 | Commercial Real Estate Leases |

If you want to lease real estate for commercial purposes, it’s expected that you will undergo a negotiation process. This will help you get the best possible deal, enabling future profitability and success. However, the negotiation process can be complex and overwhelming. Therefore, you must understand how to influence the negotiation process for your own benefit.

The following are some factors that you should try to negotiate in a commercial lease. The aspects that will be most important to you will depend on the characteristics of your business.

The rental type

Make sure that you have a full understanding of what is and is not included in the rental price before signing a lease. Not all leases are the same. For example, a gross lease tends to include all costs, including utilities and repairs. However, a net lease will mean that the insurance, utilities, taxes and repairs will need to be paid separately to the rental cost.

The rental price

The rental price will be something that you may be able to negotiate on. Consider the market prices for similar leases and try to gain leverage by showing that you understand what makes a fair price.

The length of the lease

Depending on your circumstances, you may want to shorten or lengthen the lease. A long-term lease may be better value for money, but a short-term lease will allow your business to have greater flexibility.

If you are currently negotiating a commercial real estate lease, it is important that you have a full understanding of negotiation tactics and how real estate law applies to the negotiation. An experienced attorney can provide the guidance you need.