When it comes to negotiating a commercial real estate lease, it can be a stressful and intimidating experience, especially for a first-time lessee. In order to be on the right side of such a lease, you need to strike a balance between doing your research and avoiding procrastination. Taking your time before signing the lease is one thing, delaying it unnecessarily is quite another and is a mistake that could prove costly.
The commercial real estate industry moves rapidly and if you’re not ready, you could lose the leasing opportunity entirely as the landlord finds another tenant willing to come to terms.
Here are some fast tips for lessees to follow in order to enjoy a fruitful commercial real estate lease.
No matter how much you love a property, never show a high level of enthusiasm to the landlord as this immediately places you at a weakness. If you seem overeager, the landlord may use this to his advantage and give you a less than favorable deal. Have a spreadsheet of alternative properties and always be prepared to walk away from the deal.
No single individual is likely to be an expert in all fields of commercial real estate leasing. You may need a broker, an expert negotiator, an attorney to look over the paperwork and an architect to ensure that the property matches the landlord’s descriptions. Remember, landlords have been making deals like this for years so they begin proceedings at a distinct advantage unless you have an experienced team around you.
This is a common trap laid by landlords. They push a piece of paper under your nose and announce that this is the ‘standard’ contract signed by all tenants. Just because it is their standard contract doesn’t mean that it is fair to you. As most leases will last for a lengthy period of time, the last thing you need is to be tied to a grossly unfair, legally binding contract for 3-5 years.
Ask your landlord if it is possible to sublease. This enables you to lease the property to another tenant and allows you to move without breaking your existing contract. Therefore, you can sign the contract knowing that if your business outgrows the premises, you can get in another tenant without financial penalty. Additionally, subleasing can also help cut costs if you are currently leasing more space than your business needs.
Negotiating a commercial real estate lease is of tremendous importance if you want your company to enjoy stress-free growth. Do it properly and you will receive a fair contract that provides peace of mind and enables you to concentrate on other important aspects of your business.
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