Negotiating Commercial Leases is an Important Aspect of Operating a Business

Negotiating commercial leases is an important aspect of operating a business. Factors to consider include:

• Location: What spaces are available? Can you create competition for your tenancy? Are competitors able to rent nearby?
• Rent: What does rent include? Gross leases involve one monthly payment for rent and shared costs such as taxes, utilities, and maintenance. Net leases involve one consistent monthly payment plus a variable additional amount for shared costs. What is included in additional rent? Can you review how your landlord calculates it?
• Renewal: Is loyalty rewarded? Are there new tenant incentives that could be part of your renewal terms too?
• Renovations: Can you install leasehold improvements? Who bears the cost? Who owns affixed items if you leave?
• Guarantees: Must you give a personal guarantee in support of the tenancy? Is its scope proportionate to tenancy obligations? Can the guarantee’s scope diminish as your business proves itself as a tenant?

McLeod & Schneiderat regularly helps business owners with these and other business matters. We can help you assess if a lease is right for you.