How to Negotiate a CRE Lease Like a Pro
How to Negotiate a CRE Lease Like a Pro

Negotiating any sort of lease can be critical, but is a commercial real estate lease much different than say, an apartment lease? Creating and negotiating the best lease for your business can help set the ground for you to be successful. There are certain ways to ensure you have the best possible lease for your business. We have outlined a few tips on how to negotiate your commercial real estate lease like a pro.

Do Your Research

commercial real estate leaseBefore shaking on any real estate transaction, you need to do your research. In the situation of lease negotiating, you need to research comparable leases in the area. You want to be sure you are not paying more than real estate is worth in the area. You are trying to get the best possible deal you can find, so you want to be prepared to talk down a landowner before renting/leasing. The security deposit can also be negotiated if you feel it is too much for the property. If you plan on leasing the property for a longer period of time than discussed on the lease, you may want to negotiate the conditions of lease renewal. Many landowners will want to increase rent after every lease renewal. You can negotiate a cap on these and assure the renewal cost is affordable for you.

Termination Clause

A termination clause is a part of the lease which discusses what were to happen if the lease needed to be terminated early. This can happen for many reasons, but no matter what the reasons are, you do not want to be penalized more than you can afford. Most termination clauses do have some sort of penalty; however, you can negotiate the extent to which you will get penalized. One way to help save yourself some pain is to make sure the clause has a default before eviction. Perhaps pay a whole months rent instead of the entire amount owed on the lease.

Other Costs

additional costs in commercial real estate leaseWhen typically thinking of a commercial real estate lease, you probably will focus mainly on rent and not on the additional costs which may be included. In many commercial real estate lease transactions, the tenant is responsible for maintenance costs and fees, not the landlord. You need to find out what the usual cost for maintenance will be in addition to your rent. You could then negotiate your rent determined on the cost of these additional charges. You may find it helpful to negotiate for a higher rent if the landlord would then take up the additional costs included with the property.

Most Important

The most important way to assure you get the best out of your commercial real estate lease is to READ CAREFULLY. The way a lease is worded could not make sense to you, but don’t be afraid to ask questions. Commercial real estate brokers can help you with these transactions. Contact SVN | Southgate Realty, LLC today to get started!

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