Lease Negotiation: Tips and Tricks for Commercial Tenants

Commercial lease negotiation is a critical process that requires careful attention to detail and a thorough understanding of typical lease terms. A commercial lease agreement is a legal document that outlines the lease terms between the landlord and the tenant, outlining important aspects such as rent, lease terms, and maintenance responsibilities. In this blog post, we will explore some key tips and tricks to help commercial tenants confidently navigate the lease negotiation process and secure a lease agreement that works for their business.

Understanding Typical Commercial Lease Terms

Before diving into negotiation tips, it’s important to have a basic understanding of the typical terms included in a commercial lease agreement. 

These terms may vary depending on the location and type of property, but some common ones include the following:

• Rent – The amount of money you will pay to occupy the space.

• Lease term – The time you occupy the space typically ranges from one to ten years.

• Maintenance and repairs – Responsible for maintaining and repairing the space, including any necessary renovations or improvements

• Utilities and other expenses – Responsible for paying for utilities, taxes, and other expenses related to the property

• Renewal options – Whether or not you can renew your lease at the end of the term.
• Security deposit – The amount of money you must pay upfront as a security deposit. 

Lease Negotiation Tips

Now that you have a basic understanding of common commercial lease terms let’s dive into some tips for negotiating a lease agreement that works for you.

• Do Your Research

Before entering into negotiations, it’s important to research the property and the landlord. This may include researching comparable properties to understand the going rate for similar spaces.

• Prioritize Your Must-Have Terms

Before entering into negotiations, list your must-have terms, such as the length of the lease term or the amount of rent you’re willing to pay. 

• Be Willing to Compromise

While it’s important to prioritize your must-have terms, it’s also important to be willing to compromise on some of the smaller details. 

• Get Everything in Writing

Having everything in writing can help prevent misunderstandings or disputes down the line.

Steps in commercial lease negotiation

• Know your business needs.

This includes assessing your space requirements, future growth potential, and any unique needs or considerations that may impact your business operations. 

Knowing what you need in a space will help you better negotiate the lease agreement to meet those needs.

• Assess the property before negotiating.

Before entering into negotiations, assessing the property to ensure it meets your business needs is important. This may include thoroughly inspecting the space to identify any necessary repairs or improvements and assessing the surrounding area to ensure it’s a suitable location for your business.

• Familiarize yourself with the market.

Researching comparable properties in the area will give you a sense of the going rate for similar spaces, which can help you negotiate a fair price for your lease agreement.

• Be mindful of hidden costs.

When negotiating a lease agreement, it’s essential to be mindful of hidden costs that may take time to be apparent. These can include expenses such as maintenance fees, utilities, and taxes. 

Knowing your business needs, assessing the property, familiarizing yourself with the market, understanding the lease agreement, and being mindful of hidden costs are key to successful lease negotiation. At PlistBooking, we can secure a lease agreement that works for their business and sets them up for success.

Conclusion:

Negotiating a commercial lease agreement can be a complex and overwhelming process, but with the right preparation and approach, it can be a successful one. At PlistBooking, we understand that the lease negotiation process can be daunting, especially for those new to commercial real estate. That’s why we’ve put together this guide with some tips and tricks to help you confidently navigate the negotiation process.