Six Tips for Leasing Commercial Property

Commercial warehousing

Are you interested in leasing commercial property? If this is your first time leasing commercial property, you might be surprised by how different it is from leasing a residential space. Whether your goal is leasing office space, leasing retail space, or even renting a warehouse, when you begin your journey to leasing commercial property, here are a few factors that you should keep in mind.


Six Tips for Leasing Commercial Property

  1. Is the rent appropriate for the space?

    It might be tempting to look for the lowest rent per square foot when you are renting commercial real estate. However, you should pay attention to the setup of the space and the square footage that you’re even able to get functionality out of. Consider unusable space like hallways, elevators, and bathrooms. In fact, it’s fairly standard practice to measure the commercial space by measuring the width of the exterior of the building and multiplying it by the exterior of the length. As you can imagine, the usable space within the building itself is going to be far less than the square footage of the exterior of the building.

    Also, keep in mind that the rent on most commercial leases increase by a certain percentage each year. Understand what percent you’d be subject to before signing.

  2. Get it in writing.

    The deal you’re getting now might be great, but it’s not worth the paper it isn’t written on if you don’t make sure that the contract backs up what what you’re told. If you’re able to, make sure that the lease includes wording that protects you from painful rent hikes down the road. Make sure the lease specifically states that you are allowed to use the facilities for the purpose you need it for. This simple measure can protect you from a massive amount of frustration down the road.
  3. Understand what you are and aren’t responsible for.

    In many cases, commercial leases require the tenant, not the property owner, to cover the cost of repairs and maintenance for the facilities. This can be an incredible burden when we’re talking about repairs such as air conditioners. To avoid any confusion, make sure that these details are stipulated in the contract.


    Keep in mind that you might also be subject to additional charges, such as maintenance on shared spaces, like the parking lot. Once again, the important thing is understanding what you’re responsible for and making sure it is spelled out in the contract.

  4. Consider the timeframe that you need.
    Generally, landlords are going to prefer to get you locked into longer contract, but if your business is new or you aren’t sure of your long-term plans, you might be better off with a shorter than usual contract. Most commercial leases are two to five years; if this timeframe is more than you want to commit to, you might be able to negotiate a shorter agreement. Keep in mind, you will likely have to exchange the longer contract for more expensive rent, but that might leave you better off.

  5. Understand what leeway you have to change the property.

    It is often expected that you’ll make changes to commercial space to utilize it for you business purposes, but you should make sure you understand what restrictions you have before you get into a lease agreement.


    On the same subject, make sure that you understand what state you’ll need to return the space to when you move out. If you assume that the changes you made are acceptable to stay when you leave, it might cost you the deposit you placed on the building when moving in.

  6. Get detail oriented.

    Before getting locked into an agreement, think long and hard about what extra accommodations that your business needs, outside of just the commercial space itself. For example, if your retail space needs to be able to put signage outdoors, or merchandise outside of your store, you’ll want to make sure that you’re allowed to before signing a commercial lease. Also, go into detail about about who is responsible for expenses such as taxes, insurance, and utilities.


    Another good detail to consider before signing the lease is if subletting is allowed. Some commercial leases require you to cover the rent, even if your business fails or you need to relocate.