Negotiating a Commercial Lease

Starting a business is about more than just a great idea and knowing the right people to make it happen. To get a new business off the ground, you must literally find a place to ground it—and negotiating a commercial lease can leave many inexperienced entrepreneurs burned. After the housing market crash of 2008, commercial real estate reached a new level of accessibility and affordability. As Paul G.W. Fetscher, president of Great American Brokerage, told Entrepreneur magazine in 2010, “I’ve never seen better deals.” According to Entrepreneur, this post-market crash era could be the best tiNegotiating-a-Commercial-Lease-IMAGEme ever to rent a space to get a business started. “The nation’s 102,000 shopping centers are dotted with vacancies that landlords are desperate to fill,” reports Entrepreneur.

But this enthusiasm on the landlord’s part comes with a price. “Landlords may be anxious to fill empty spaces, but they’re also eager to make up for the money they’ve lost during the recession, and unless you’re careful, that bargain lease you sign today can be filled with hidden charges, escalating fees and clauses that kick in when you’d least expect it” according to Entrepreneur.

There are several things you can do, according to the Small Business Administration (SBA), to ensure that you don’t end up with a commercial lease like this. The trick of setting the term of your lease, reports the SBA, is “not to over-commit while giving yourself some flexibility for the long term.” Be sure to address what expenses are covered in the lease—will they fix the roof? Are utilities calculated by square footage or individually metered? Who handles maintenance and repair? According to the SBA, “businesses get closed down without prior notice all the time because they defaulted on their lease.” One important detail to consider with a commercial lease is what happens if you do default. Will your business capitulate?

The most important thing to do, of course, is to seek with counsel of a qualified business attorney. No business can ever become viable without a lawyer, and having him or her to help wade through the complicated paperwork of commercial leases is just one aspect they can help you with. Contact a dedicated Chicago-area business attorney today.

Image courtesy of Naypong / FreeDigitalPhotos.net