Lease Commercial Property
Leasing commercial property involves several important considerations. Here are the main things to know:
-
1. Types of Leases:Gross Lease: The landlord pays for property taxes, insurance, and maintenance. You pay a single rent amount.Net Lease: You pay rent plus some or all of the property expenses (taxes, insurance, maintenance).
- Single Net Lease (N): Tenant pays property taxes.
- Double Net Lease (NN): Tenant pays property taxes and insurance.
- Triple Net Lease (NNN): Tenant pays property taxes, insurance, and maintenance.
- Percentage Lease: You pay a base rent plus a percentage of your sales.
2. Lease Terms
- Length of Lease: Consider the duration of the lease and the flexibility you might need.
- Rent Escalations: Understand how and when the rent will increase.
- Renewal Options: Check if there are options to renew the lease and the terms for renewal.
3.Legal Considerations
- Zoning Laws: Ensure the property is zoned for your type of business.
- Lease Clauses: Review and understand key clauses such as subleasing, termination, and default clauses.
- Liability and Insurance: Understand your liability and insurance requirements.
4. Due Diligence
- Inspect the Property: Conduct a thorough inspection to identify any issues.
- Financial Health of Landlord: Consider the financial stability of the landlord.
- Market Research: Research comparable properties to ensure you’re getting a fair deal.
5.Prepare for Occupancy
- Permits and Licenses: Obtain any necessary permits or licenses to operate your business.
- Utilities and Services: Set up utilities and any other necessary services.
- Move-In Plan: Plan your move-in to minimize disruption to your business.
By understanding these key aspects, you can make a more informed decision when leasing commercial property and negotiate terms that best suit your business needs.
