When signing a commercial lease, it is essential to understand and agree to all of the provisions. Provisions are usually designed to favor the landlord; however, a landlord may be willing to negotiate. Experienced luxury real estate attorneys should be consulted before entering a commercial lease. Here are a few essential provisions that should be clearly understood prior to signing:
Term – A short-term lease provides a tenant with more flexibility for changing needs. A tenant may decide to change locations or move to a space with more or less square footage. If a tenant is confident in the location they are choosing, it may be advantageous to negotiate a long-term lease. With a long-term lease, a tenant does not have to worry about the landlord renewing the lease and may receive a better rent payment or other concessions. An additional option is to negotiate a short-term lease with an option to extend or renew. While an extension gives the existing lease a new end date, a renewal results in both a new beginning and end date.