How to Lease Commercial Real Estate

Leasing commercial real estate for your business is a big undertaking. Most business owners don’t take the decision lightly, yet even the most experienced business person can end up trapped in a building that costs too much, doesn’t allow room for growth, is located in a bad market, or much worse.

So, how do you find a commercial real estate property that will work for your company and negotiate a lease that will keep you protected? Let’s discuss.

Length of Lease

It is important to know that every single clause on a commercial lease is negotiable, and this includes the length of the lease. That said, most landlords will be unlikely to budge when it comes to the length of your stay. On average, you can expect to sign a 3-5 year lease on any commercial space.

For small to medium size businesses, flexibility of space is key. Will your company grow or remain the same? This should help you decide how long you want to stay. Additionally, if you could see your business staying in the space past the 5 year mark, it would be wise to ask what the percentage of rental increase would be so you know what you can expect.

Surrounding Properties

Take a look at the properties nearby. What are they paying for rent? Are you being overcharged? Is your company in direct competition with a nearby business? These are important things to consider as they may directly affect your profit margins.

“Out” Clause or Sublease Clause

In case your business faces bankruptcy, or any other serious concern, it is important to determine an ‘escape route.’ Of course, very few circumstances would leave a landlord comfortable with letting you out of your lease, but some are negotiable. At the very least, they may allow you to find a sublessee for your property instead of facing serious charges.

Hire a Commercial Real Estate Agent

There is a lot that can be negotiated when signing a lease on a commercial property, and it can be very confusing. It is important to shield yourself, and your business, by hiring an expert. Commercial real estate agents understand the market and have in-depth knowledge of these types of contracts. Working with a commercial real estate agent could be the difference between a peaceful landlord-tenant relationship, or disaster.

Are you seeking commercial real estate to lease or purchase in Birmingham, AL? LAH Commercial can guide you along the way. Contact us today

Related Posts

Agent Spotlight Dee Kennedy

Agent Spotlight Dee Kennedy

Dee Kennedy has always been interested in real estate, but after a year like 2020, she realized anything was possible and decided to leap into the industry. During that time, Dee was going through purchasing her first home and working with the listing agent who...

Agent Spotlight Tori Hayes

Agent Spotlight Tori Hayes

Although Tori Hayes has only been with LAH since September, she has always been fascinated by real estate. When she was young on family beach trips, Tori would be captivated by listening to her aunt and uncle talk about their real estate business in Foley....

Agent Spotlight Anna Frances Bradley

Agent Spotlight Anna Frances Bradley

After graduating from Auburn in 1999, Anna Frances Bradley didn’t really know what was next for her. Upon weighing the options of grad school, her family suggested that she take a job answering phones somewhere fun. As luck would have it, one of the first available...