Negotiating a commercial real estate lease can be complex and time-consuming. Because of this, you’ll want an experienced South Florida commercial real estate lawyer available to help you through the terminology and ensure that your lease is favorable. The more effort that you put into negotiating a favorable lease, the more that you’ll save in the long run.
Be careful about escalation clauses
Escalation clauses are often added by landlords as a common way to pay for any increases in costs that may be required to maintain the building.
Although these clauses are very valid, if you don’t negotiate them to be fair and reasonable, you may be on the hook for major potential rent increases. Get the assistance of your attorney when negotiating these clauses.
Research other comparable properties
You’ll always want to make sure that you’re getting the best deal possible and avoid rushing into signing a lease. That means you should do your best to look at comparable properties and try to gauge what your rent will be at those locations.
There are multiple factors that will determine your final monthly costs. However, if there is a promise for a better deal at a similar or better location, it’s well worth investigating.
Check the amount of space your renting
One of the more common mistakes made by commercial tenants is that they often overpay for space that they don’t use. For example, the lease may include a multiplying factor cost which is used to calculate the tenant’s use of common areas such as lobbies, hallways or conference rooms.
If you are a smaller operation and you aren’t going to use these areas as much as other tenants in the building, don’t automatically agree to a multiplying factor. Instead, try to negotiate it down with the help of your commercial real estate lawyer.
Research the property
Try to obtain information about current tenants and the property itself, as it will be helpful when it comes time for lease negotiations.
For example, you will want to find out if there are any businesses in the building that could be considered competitors. You might also try to determine if there is a sufficient amount of parking space for your business.
If foot traffic is important for your business, talk to other local business owners about it. Try to get an idea about how much foot traffic you can expect and if it has been increasing or decreasing in recent months.
Get a lawyer involved
While hashing out the details of your lease, you’ll always want to have a lawyer available to advise you, assist with negotiations, and review your lease prior to signing it. Commercial leases are complex and there are many opportunities for mistakes that can cost you significantly in the long run.
If you’re currently negotiating a commercial lease, contact Schecter Law today at (954) 779-7009 for any advice you may need.