After a thoughtful and thorough search, you’ve found the ideal commercial property for your business – whether you’re planning to open a storefront, gym, restaurant, medical office, or another type of operation.
Before you can move forward with your entrepreneurial plans, however, you must negotiate a commercial lease. The terms can have a significant impact on your long-term success in the space, so it’s vital to carefully consider the details and ensure you obtain the best possible agreement.
Before you sign, we recommend leveraging the following recommendations on how to negotiate a commercial lease that’s optimal for your business.
1. Research rent in the area for a point of comparison.
Look into market rents and see how they compare to your prospective landlord’s asking rent, BDC Business Centre Manager Brett Prikker advises, according to the article “How to negotiate a commercial lease effectively.”
2. Watch out for hidden fees.
Don’t get caught off-guard by unexpected costs after signing a lease. It’s wise to review everything in detail and ensure you’re aware of your full financial responsibility, according to the CapitalOne Business Deals article “A guide to negotiating lease agreements: 5 tips to follow.” For instance, check the terms to see if you’re responsible for paying for insurance, maintenance, and utilities.
Your expenditures can vary significantly depending on the type of lease, according to BDC. A gross rent lease usually involves paying a higher rent that accounts for the base rent and incidentals such as insurance, maintenance, and utilities. On the other hand, a net lease typically involves paying base rent plus either utilities, insurance, or property taxes. Be sure to confirm which variety of lease you’re dealing with before signing.
3. Consider renewal and termination conditions.
Before you sign a lease, Prikker suggests reviewing the clauses specifying when and how either party can terminate the lease, according to BDC. Additionally, it’s vital to go over the process and terms for renewing your lease.
4. Check for a subleasing clause.
If the lease doesn’t include a clause allowing you to sublease, you might want to advocate to add one. That way, if you want to move before your lease ends, you can do so without the hassle and potential fees associated with terminating the agreement early.
5. Partner with a commercial real estate expert.
It pays to have someone on your side who has experience negotiating a commercial lease and knows the commercial real estate industry inside and out. If you need expert assistance negotiating a commercial lease, the Avalon Realty Associates team would be happy to help you. Our client services include tenant representation. We’ll assess your leasing needs and tackle the terms with extreme attention to detail.
Start today by calling 847-506-1000 or emailing firstname.lastname@example.org to connect with our team of experienced Chicago commercial real estate brokers. You can also reach us by visiting our Contact Us page.