In the Charleston area, there is an abundance of choice and favorable market conditions for commercial real estate. If you are a new or growing business, you will need to understand how to negotiate a commercial lease for the success of your business. The negotiation process can be complex and daunting, and it requires research and due diligence. Caldwell Commercial Real Estate specializes in strong commercial property lease negotiation and is here to serve you and your business.
Once you have located that perfect location, there are several important things you will need to consider when leasing a property.
1. What is my first negotiating point with a commercial lease?
Do not over commit in the negotiating process when setting terms for time commitment to leasing the space and in rent increases. It is generally recommended that you lease a space for one or two years with the option to renew and have clear terms concerning rent increases. Caldwell Commercial understands the local Charleston market and can guide you through the process as you negotiate these terms with the landlord.
2. What expenses can I expect in commercial property lease negotiation?
Ask to see about any “hidden fees” associated with your lease. Often a landlord will include additional fees for the upkeep of the shared property (common area maintenance fees). You may also be responsible for paying taxes, insurance and utilities. Your broker can help negotiate these terms and ascertain how these expenses are measured. For example, are they individually measured or determined by square footage?
3. Who is responsible for maintenance and repairs?
Commercial property leases vary terms about who is responsible for maintenance and repairs. Some leases stipulate that you are responsible for all repairs, while others may hold you responsible for maintaining and repairing systems such as air conditioning and plumbing. Make sure to set clear dollar limits on how much you must pay for maintenance and repairs.
4. What clauses should I include in my commercial lease?
To protect your investment and business, you will want to consider the following add-on clauses in your lease.
- Consider a sublease clause to give you flexibility to make changes in your business and sublet your space.
- Establish an exclusivity clause to prevent the landlord from renting space to a direct competitor of your business.
- Negotiate a co-tenancy clause to enable you to break your lease if an anchor store leaves your building, and affects your customer base.
5. What happens if I default?
If the unexpected happens and you close down prior to the expiration of your lease, you will need to have a clear understanding with the landlord about how to proceed. For example, will you immediately be locked out of the premises? Will the landlord initiate eviction proceedings? Are you able to negotiate more time to pay the rent owed, say on a month to month basis?
Caldwell Commercial real estate can help you negotiate the best terms for your business. Email us today at firstname.lastname@example.org to get started with your next commercial property lease negotiation.