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The basics of commercial real estate leases

On behalf of Kadish & Associates Law Group posted in Commercial Real Estate on Friday, January 8, 2016.

Renting commercial property makes sense for some Arizona businesses. The process of negotiating a commercial real estate lease, however, might not make as much sense. This is mainly because there is not necessarily a standard for these agreements, and many of their provisions are subject to numerous factors.

For instance, if the rental market is competitive, the landlord will most likely have more negotiating power when it comes to rental payments and other provisions of the lease. However, if the landlord’s property has been vacant for some time, the renter has more of the power in the negotiations. This is just one of the reasons why it is important to understand commercial property leases and the different types of rental arrangements, such as whether the lease will be gross or net.

In many cases, the length of the lease will influence its provisions. The longer the term of the lease, the more likely a landlord is to make concessions. This is because the property owner can look forward to a steady income over a long period. Other provisions, such as making improvements to the property, subleasing it or how the property may be used, are all subject to negotiation.

Whether a party to a commercial real estate lease is the proprietor or the renter, each party wants to receive the best terms possible. In contrast, neither party wants to be taken advantage of either. Therefore, it would be advisable to engage the services of counsel who understands this area of law to provide assistance with negotiating, drafting and executing such a lease in Arizona.

Source: FindLaw, “Negotiating a Lease for Commercial Real Estate”, Accessed on Jan 2, 2016

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