Basic Mistakes Made When Entering Into A Commercial Lease Agreement

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Basic Mistakes Made When Entering Into A Commercial Lease Agreement

Not being aware of the market and your options…#1 costly mistake.

Is there a better building for less rent nearby? Is there a building advertising higher rent; however the landlord will give free rent to bring down the effective rate? Is there a sublease which fits your needs and available for below market?

Unaware of zoning, the area and allowable uses

Are there any restrictions on your property thru CCR’s, owner rules or Zoning which could prevent you from running your business? Are there any adjacent uses which present a nuisance thru sound or odor? Rail road crossings which are always blocked with rail cars?

Not understanding office building particulars

In an office building do you have adequate parking? Is your parking extra? How much is after hours HVAC usage? Are there nearby eating establishments? How is crime? Are the elevators slow and parking access jumbled to the point that it adds 10 minutes to your employees’ trip to their cars?

Failure to negotiate an attractive lease term and renewal options

Our motto is the shorter the term with the most renewal options. If you can lock in an agreeable rate in your renewal options, you can preserve flexibility if your business grows or downsizes.

Not having first rights of refusal

Having the first shot at adjacent space is crucial if your business is on its way up. Understanding these business points is imperative.

Not limiting and/or understanding expense pass thrus

Whether it is a NNN, Net, Gross, or Modified Gross lease, you need to know what the landlord CAN pass thru to you in the way of operating expenses. Negotiate a limit to the greatest extent as reasonably possible.

These are just a few of many mistakes or points overlooked when entering a lease agreement.

Have a question about your lease? Contact us for a free broker lease evaluation.

Click here…

Eric Hughes - Broker

Industrial and Office Brokerage

(713) 744-7402 line

(281) 236-9553 cell

(713) 856-5100 fax

Eric Hughes
August 1, 2009

Source: http://www.warehousefinder.net

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