Your Guide to Leasing Commercial Property

What is Commercial Property Leasing?

Commercial property leasing involves an agreement between a property owner and a business (or individual) to rent a commercial space for a set period. This type of lease can cover a variety of spaces, such as retail stores, office buildings, or industrial warehouses.

Leasing commercial property often differs from residential leases, as it includes more detailed terms and conditions tailored to business needs.

How to Lease Commercial Property

Leasing commercial property requires a clear understanding of the process and your business’s specific needs. Here’s a step-by-step guide:

Determine Your Requirements: Assess your business’s size, location preferences, and any special requirements like parking, accessibility, or proximity to other businesses.

Research Available Listings: Look for commercial properties for lease in your desired area. Use websites like LoopNet, Zillow, and commercial real estate platforms to find up-to-date listings.

Engage a Leasing Agent: A commercial leasing agent can help identify suitable properties, navigate lease terms, and offer insight into current market trends.

Inspect the Property: Before signing any lease agreement, thoroughly inspect the space for potential issues or necessary upgrades that could impact your business.

How Do Commercial Property Leases Work?

Commercial leases differ from residential leases in several ways. Here’s how they generally function:

Lease Term: Commercial leases often involve long-term agreements, typically ranging from 3 to 10 years, though shorter leases may also be available.

Rent Structure: Rent may be a fixed amount or based on a business’s revenue. Some leases include rent escalations, where the rent increases annually or at agreed-upon intervals.

Common Area Maintenance (CAM): Many commercial leases include CAM fees that cover shared spaces like hallways, parking lots, and lobbies. These fees are usually prorated based on the space you occupy.

Utilities & Taxes: You may be responsible for paying utilities and property taxes, which should be specified in the lease agreement.

How to Find Commercial Property for Lease

To find the right commercial space, you’ll need to do thorough research. Here’s how you can start:

Commercial Real Estate Websites: Use platforms like LoopNet, CREXi, and Realtor.com to search by location, size, and price.

Hire a Leasing Agent: A leasing agent can help narrow down your options and guide you through the negotiation process.

Look for Signage: In many areas, property owners advertise available spaces with “For Lease” signs. Driving through your desired area may lead to discovering unlisted properties.

How to Negotiate a Lease on Commercial Property

Negotiating a commercial lease can be complex, but knowing the key elements can give you an advantage:

Understand Market Rates: Research comparable commercial lease properties in your area to ensure you’re getting a fair deal.

Negotiate Rent Terms: Rent rates, payment schedules, and potential rent increases are negotiable. Discuss these terms with your leasing agent or attorney.

Tenant Improvements: If modifications are needed, negotiate with the landlord to cover or contribute to these costs.

Lease Renewal Options: Ensure the lease includes an option to renew at a fair rate, particularly if your business is expanding.

Exit Clauses: It’s important to negotiate exit clauses that allow for early lease termination if your business needs change unexpectedly.

Final Thoughts

Leasing commercial property is a significant decision that can impact your business for years. Whether you're looking for office space, retail storefronts, or industrial warehouses, it’s essential to work with a trusted commercial property leasing agent. Their expertise can guide you through the process, help negotiate the best deal, and secure the ideal location for your business.