New York business owners know the importance of a good commercial lease. Unlike residential leases, commercial leases tend to be longer, sometimes lasting several years, so you must make sure your commercial lease meets your goals.
Another difference between commercial and residential leases is that you can negotiate the terms of a commercial lease. This is not usually an option with a residential lease, where you must “take it or leave it.”
Negotiating a commercial lease for the first time can be daunting, but these tips can help.
Know your business inside and out, particularly your financial picture. One of the worst scenarios you can find yourself in is being stuck with many years left on a commercial lease and becoming unable to afford the payments.
Learn and understand the different real estate terms
Unless your business is a real estate business, chances are, you are not educated on real estate terminology. This is understandable, but property owners might try to take advantage of this.
Study real estate terminology and become familiar with the basic terms included in commercial leases. Learn about what added costs you could be responsible for, such as utilities, taxes or insurance and understand to spot these clauses in the lease.
There are also different types of commercial leases, such as gross leases, net leases or absolute NNN leases. Learn about each type of lease and determine which one works best for your situation.
Negotiating the rent
Research comparable rents in the area. Have these numbers ready when it is time to negotiate rent.
Additionally, try to negotiate a rent cap into the lease. This helps you avoid a rent increase that you cannot afford that could jeopardize your business. You can negotiate other costs, as well, such as your security deposit.
Overall, remember that a commercial lease is a long-term investment. Making every decision with this in mind will help you to make a smart decision and help ensure the continued success of your business.