If you're a business owner looking to rent a piece of property for your retail space, you're about to make a big commitment. Commercial property leases tend to extend for years into the future and once you sign the deal, it will be too late to make a change.
To help you prepare, here are a few important questions to ask before signing a commercial property lease:
- Do I understand every piece of the lease? Your commercial property lease will contain a lot of different terms and clauses. It's important that you understand each and every part of your lease. Fortunately, most leases are written in everyday language, but if there's any part of your lease that you can't comprehend, be sure to ask for help.
- Have I negotiated all of the terms that are important to me? The best business owners are excellent negotiators. If there are certain aspects of the lease that you can't afford -- or aspects of the lease that don't suit your needs and wishes -- you should take the time to negotiate the best deal possible. Or, look for another property that better suits your needs.
- Have you considered a CAM Stop lease? Modern leases are usually "triple net," which means that you need to pay rent in addition to your share of CAM, in addition to property tax. In a CAM Stop lease, you'll only pay for the annual increase in CAM and property tax, using your first lease year as the base year. This can help you predict your costs into the future with better accuracy.
There are a lot more things you need to consider when searching for and negotiating the terms of a good commercial lease deal. However, the above questions are a great place to start. Ultimately, the more you know about commercial leasing practices and your local market, the better off you and your business will be.
Source: The Balance, "10 Questions to Ask Before Signing a Commercial Lease," Jean Murray, Dec. 05, 2017