If you are starting your search for commercial property for rent or you are already in the process of negotiating a lease for office space real estate, you might be wondering what the appropriate amount of time the lease should be for. This is something that depends on a variety of factors. What’s important is to remember that you don’t have to sign a contract that doesn’t work well with your budget or your business plans. As a tenant, you have the right to walk away and to ask for what you need in a contract. Having an expert commercial real estate broker helping you out with negotiating a lease is always an advantage, so keep that in mind before you decide to handle things on your own. Let’s look at some of the main factors that influence an office space real estate lease term.
Landlord Personal Preferences
Sometimes, landlords are only willing to lease their property to tenants for long periods of time. They want to lock in their tenants for a long period of time because it makes their life easier and guarantees them monthly rental income on their office space real estate. If you are dealing with a landlord that won’t negotiate the amount of time in the lease, you can factor that into the monthly rent price.
Another one of the biggest factors that will determine the amount of time on a lease for commercial property for rent is the current market conditions. If there isn’t a lot of vacancy for office space real estate in your areas, you might only be able to sign leases for 3-5 years or more. Landlords always prefer to have longer-term contracts, which means if demand is high in the market you are looking for, you might not be able to find short term leases.
If you are leasing office space real estate, there’s a good chance you will receive a tenant improvement allowance from your landlord. If they are giving you a lot of money for tenant improvements, you will likely be receiving a longer term on your lease.
Remember that if a deal doesn’t work for you or doesn’t make business sense, you can always walk away! Contact the Rakow Group if you have any questions about office space real estate leasing terms or would like help with any steps in the commercial leasing process.