Written by Avvo Staff

Tips for leasing commercial property

Carefully consider the lease terms and local zoning laws when renting commercial real estate

Leasing commercial real estate can seem like an overwhelming process, but it helps if you know what to expect and how you should respond to issues as they arise. Whether you're looking for an office space or a storefront, these tips will help you complete the transaction successfully.

Consider the type of space that's right for your business

As you evaluate commercial spaces, look for features and characteristics that will help you build your business, gain customers, and establish a positive reputation. A commercial space that works well for one business may not serve another.

Start with the space's location. If you're opening a retail store or a restaurant, for instance, you'll want a space that potential customers can see from nearby streets. Alternatively, if you're starting a business that deals primarily with online or telephone correspondence, a more discreet location will do.

Similarly, you'll want a space where you can afford the rent and that offers enough space for your business. Don't just consider square footage. A retail storefront, for example, needs space for merchandise storage as well as display. You might also need ample parking.

Pay attention to lease terms

After you choose a space, read the proposed lease carefully. Look for any provisions or terms that could compromise your business. Florida real estate attorney, Andrew John Bernhard, notes that leases should specify the condition of the space, list a lease duration, outline your obligations, and detail your rights.

When leasing commercial property, you'll want to know when you can get out of the lease. For instance, how much will the landlord charge to cancel the lease? If you fulfill the lease in its entirety, what is the lease-end protocol?

Negotiate the lease terms

When renting commercial property, you can often negotiate the terms of the lease. For instance, California business and real estate attorney, Elroy Schneider, recommends negotiating the lease term. A longer lease could extend the duration of your initial rent amount. After the lease expires, the landlord might raise the rent for the next signing.

You can also negotiate issues like tenant improvement allowances (money you can use to make improvements to the space so it better suits your business) and even the rent amount. If you don't feel comfortable negotiating on your own, consider hiring an attorney to help negotiate and to review a commercial lease.

Consider the effect of zoning laws

Zoning and land use laws dictate how owners and renters can use a piece of property. For instance, a parcel that has been zoned residential can't be used for business purposes.

An industrial business typically can't use a space that has commercial zoning because of noise issues and other concerns. Even for properties that are zoned commercial, however, you can't always operate a specific type of business there.

For example, ordinances and zoning requirements might stop bar from opening near a school. Alternatively, some zoning restrictions limit the number of patrons a business can attract based on the building size or available parking.

Before signing a lease, investigate the zoning and land use requirements to protect yourself. Starting a business requires considerable forethought and strategy. This is especially true when it comes to leasing commercial property. The more you research in advance, the easier it becomes to pick the perfect location and structure

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