July 2, 2021
Did you find the perfect commercial retail space? Then the next step is to negotiate the lease. Read on to learn everything you need to know about negotiating a commercial lease for retail space:
The type of commercial lease you have will determine exactly what your monthly rent actually covers. Some commercial leases ensure the landlord is responsible for building maintenance; others make the tenants responsible for day-to-day operation and maintenance fees and even significant repairs on the commercial building itself.
Commercial lease types include:
The first draft of a lease is just that: a draft. Commercial leases typically undergo several rounds of negotiations, so it’s wise to allow plenty of time for the back-and-forth of coming to a mutual agreement. As you negotiate a commercial lease for your retail space, keep the following tips in mind:
While long-term leases aren’t ideal for every business, they offer more leverage when negotiating. A longer lease gives landlords the security of knowing they won’t have to go shopping for a new tenant in the immediate future, and it allows you a bit more leverage when it comes to nailing down favorable terms.
What exactly is a must-have for you? If you’re set on a lease that puts all building maintenance costs on the shoulders of the landlord, that’s something you need to clarify before entering negotiations — but you might need to be flexible on less essential items on your wish list.
We mean flexibility in adding early termination clauses, the option to sublet if necessary, or assignment clauses that could help you out if your business plans don’t align with your goals. Working these features into your lease can be a life-saver later on.
What improvements will you need to make to start work in the new storefront? Assess how much these improvements will cost. Your landlord might be unwilling to provide for a large tenant improvement allowance, but negotiating a rent abatement might offset your initial costs for those improvements.
The best commercial real estate broker is the one who’s familiar with the market in your area and represents your interests from beginning to end. A skilled broker will also negotiate a detailed term sheet which will lead to smoother sailing once the lease negotiations ensue. Tenant representation services will serve as your advocate as you negotiate and renegotiate your lease terms.
When it comes to New York and Connecticut commercial realty, Rakow Commercial Realty Group offers powerful allies throughout the building search and representation process. As a New York commercial realty firm offering buyer and tenant representation services, we have decades of cumulative experience working with tenants and landlords. Wondering how to renegotiate a commercial lease, how to begin your commercial building search, or where to go to find relevant commercial real estate listings? Get in touch with our experts today!
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