Steps to Entering a Commercial Lease

Determine Your Needs and Budget

Before you start searching for commercial space, take time to clearly define what your business requires. Consider the following factors:

• Square footage requirements for your operations, inventory, and growth
• Location preferences, including proximity to customers, suppliers, and transportation
• Zoning requirements for your type of business
• Parking needs for employees and customers
• Budget for rent and additional expenses (utilities, CAM, insurance)
• Lease term length that aligns with your business plans

Having a clear understanding of your needs will help you and your agent focus on properties that are the right fit.

Find the Right Property

Searching for commercial property is a lot like searching for a new home. The most efficient and effective way to find the best commercial space is to partner with a commercial real estate agent who understands the local market and can guide you through the shopping process.

A commercial agent will:

• Identify properties that match your requirements
• Schedule tours and provide market insights
• Share comparable lease rates and terms in the area
• Help you evaluate the pros and cons of each option

Don't rush this step. The right space can set your business up for success, while the wrong one can create ongoing challenges.

Review and Negotiate the Lease

Once you've found a property, it's time to analyze the commercial lease agreement the landlord wants to enter into. Pay close attention to:

• Lease type: Is it a net lease, gross lease, or modified lease? Understand what expenses you'll be responsible for.
• Rent escalations: How will rent increase over the term of the lease?
• Tenant improvements: Will the landlord provide a build-out allowance?
• Renewal options: Do you have the right to extend the lease?
• Exit clauses: What happens if you need to terminate early?

There's almost always room to negotiate in commercial leasing. Your agent can represent you during negotiations to help secure favorable terms that match your business goals.

Sign the Lease and Move In

After negotiations are complete and you're satisfied with the terms, it's time to sign the lease agreement. Before signing, make sure you:

• Review the final lease document carefully with your attorney if needed
• Confirm all negotiated terms are included in writing
• Understand your move-in date and any build-out timeline
• Have your security deposit and first month's rent ready

Once the lease is signed, you'll gain access to your new commercial space and can begin setting up your business operations. Congratulations on taking this important step!