subject: Things To Remember When Negotiating A Commercial Lease [print this page] Look at a commercial lease like any other business contract
For some reason, many business owners do not realize that commercial leases are just as negotiable as other types of business contracts. Anyone experienced with negotiating business contracts knows that each party will first propose a contract that is most favorable to them. Therefore, business owners seldom accept the very first contract offered to them. Instead, they propose changes to make the terms more fair. Agreeing to a commercial lease should be no different. Remember that the terms a landlord presents are not set in stone. Give counteroffers so that you can get the best agreement.
Know your deal breakers
It is essential when entering any type of negotiation to know which points you will not compromise on. Will you accept only a short-term lease, or will you consider a long-term lease for a decreased cost? Will you require a lease that allows you to make your own renovations to the space, or are you happy with leaving the space the same way you found it? It will be very helpful to know in advance exactly what you need from a potential space. That way, you can stand firm on the key contract terms but remain flexible on other terms. Some malleability will make interactions with a landlord go more smoothly.
Make sure there is enough flexibility
Businesses grow and change over time. If you are locked into a long-term lease, you might have trouble expanding to match your growing customer base. When negotiating a commercial lease, make sure to include enough flexibility to allow you to make a smooth exit if you need to. One way to achieve this balance is through sublease agreements. Commercial leases will often let you sublease the space if you move out. Another tactic is to make the commercial lease short-term and renewable from the start.
Take your time
Imagine you have just seen a great space. The landlord says other renters are interested. He says he needs an answer by the end of the day, or you will lose out on this incredible opportunity. Your heart starts to beat faster. You have a sudden urge to sign on the dotted line that very instant. Do not do it. Be wary of hard-sell tactics. When a landlord starts to sound like a used cars salesman, you should take a step back and collect yourself. Entering into a commercial lease is a big decision that can have serious ramifications for your business. If you let yourself be pressured into making a quick decision, you will likely regret it. Take deep breaths and keep your mind clear so you will not be ruled by your emotions.
by: Peter Wendt
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