Maybe you have never leased commercial space before, but you have a new business ready to get started. Or maybe you have been tasked with finding a new location for your company. Either way, here are the top ten questions we get about commercial leases:
- How long of a lease should I have?
This depends a lot on your particular needs but in our experience, you need several years to get a new business settled in. In the case of an established business, it is typical to see 5 year terms and options for renewal that lock your rate in. The options protect the tenant from big price swings down the road, but still allow you to renegotiate if the market changes.
- Should I have an attorney review my lease?
That depends. Many times, the language in the lease is pretty straight forward. However, if you don’t understand any of the terms or just aren’t comfortable with the verbiage, have your lease reviewed. You will sleep better knowing you are protected.
- What is a typical deposit for a lease?
Typically, lease deposits are 1 to 2 months rent, depending on the risk of the landlord, the credit of the tenant and if there are any things that are potentially valuable included in the real estate, like potentially resturant equipment
Maybe. That depends on the lease, but we always recommend getting permission in writing before making changes to a leased space. Remeber, you are only borrowing the space, and may have to return it to its original condition at move out.
- Why would a landlord not lease to me?
It could be a number of reasons. In retail leases, often times there are uses that are protected by non-compete clauses. These keep competing businesses out, and sometimes even uses that you may not think of as competing. Sometimes, landlords are looking for a certain mix of tenant type or risk profile. They may want to make sure that a business in a retail storefront is open 7 days a week, and not a part time use, or one that is not open often. They also can have concerns about noise and disturbing other tenants.
- How much space do I need?
That is something that is different for everyone. For office, its often so much space per person. In retail, its often just based on the amount of product you wish to display. We suggest seeing multiple properties to get a good sense of what a size looks like.
- What is the best location for my business?
Location depends on who is most important to your business. Do you need to be close to a customer? Are you looking to make it easier for employees to get to work? Does your work require to be in a certain county or City?
- What are all these lease types? What do they mean?
We know lease types are confusing! Visit the Education Center
and our link "Understanding Lease Types
" for more details.
- Can I do this without an agent?
Very likely, yes! However, a leasing agent generally is paid for by a commision from the landlord. So you get the benefit of a trained professional working on your behalf, and they get paid by someone else. So maybe the questions should be, Why would I do this by myself?
Maybe. Legally, once you sign a lease, its legally binding. Often, things happen that you dont have a plan for. In these cases, we recomend discussing the issue with the landlord and see if there is a way to resolve it. If not, you need to contact an attorney for assitance in terminating the lease.