03/01/2026
When leasing commercial real estate, one of the biggest mistakes people make is committing to a lease without understanding the terms.
Unlike residential real estate, commercial leases do not follow standard terms. Tenants are responsible for negotiating the terms of their lease agreements.
Tips to consider when negotiating a lease:
Protect your interests by hiring professional commercial real estate broker. A commercial real estate broker can help negotiate your lease terms, including the addition of certain clauses like early-termination terms, sublease rules, and assignability. Have a real estate attorney review your lease before you sign it.
Understand costs and fees upfront. Most leasing costs are calculated per square foot. However, depending on the type of lease you have, additional costs—like property taxes, insurance, utilities, trash collection, and CAM.
Find out what amenities are included. Amenities can make a big difference in what location you choose to lease. Ask about basic amenities (like wiring for high-speed Internet, shared versus private bathrooms, and central air) or unique bonuses (like fitness rooms, special partner discounts, and security systems).
Negotiate the length of your lease. Landlords typically favor longer lease agreements, but shorter, 1- to 2-year leases with options to renew give tenants the flexibility to reevaluate how things are going financially after their leases are over.
Know that you’ll likely have to sign a personal guarantee. Most landlords will do a personal finance check and require tenants to sign a personal guarantee, saying they are liable if the business isn’t able to pay the rent.
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