Essential Dos and Don'ts for a Successful Lease Experience

A commercial lease can affect far more than where your company operates. Cost, flexibility, employee access, future growth, and long-term business plans can all be influenced by decisions made before the lease is signed.

A successful lease experience starts with knowing what to evaluate, what to negotiate, and what not to overlook. These essential dos and don'ts can help business leaders approach the process with greater clarity and protect their options before making a long-term commitment.

What Should You Do Before Signing a Commercial Lease?

1. Do Seek Qualified Legal Advice to fully understand your rights, responsibilities, and potential liabilities when engaging in any real estate transaction. Beyond advice from your commercial real estate broker, consulting with a qualified legal professional can give you valuable insights and guidance to protect your interests and make informed decisions. This proactive approach will provide a clear understanding of the legal implications involved, ultimately ensuring a smoother and more secure real estate experience.
2. Do Conduct a Thorough Property Inspection. Identify any existing issues or required repairs and ensure the landlord addresses them. For Inspections, look for companies that are licensed and experienced. They often offer services such as structural inspections, environmental assessments, mechanical and electrical system evaluations, and compliance checks with local building codes and regulations.
3. Do Protect Your Negotiating Position. Before a lease negotiation or renewal, determine what information should remain internal and what should be communicated to the landlord. Revealing too much about your intentions, timeline, or desire to remain in the property can weaken your negotiating leverage.
4. Do Evaluate Location, Safety, and Operational Fit. Your commercial real estate advocate can provide data regarding the area’s crime rates and types of crime to help you understand how much security is advised. Your business and employees' safety should be a top priority, so ensuring the premises have adequate security systems and protocols is essential. By taking this proactive step, you can provide a secure and safe environment for your business operations.

What Should You Avoid When Leasing Commercial Real Estate?

1. Don't Rush the Process; Starting early gives your company time to evaluate the market, compare alternatives, negotiate terms, and account for design, construction, permitting, or relocation requirements. Rushing into signing a lease without a comprehensive review of all terms and conditions can lead to unforeseen challenges. Take the time to negotiate and seek clarity on any ambiguous clauses. Understanding the intricacies of the lease agreement is crucial to ensuring that it aligns with your business goals and provides a solid foundation for your commercial real estate endeavors.
   
2. Don't Choose a Location Based on the Building Alone. Consider factors such as proximity to your target market, transportation links, and amenities that would benefit your business. Additionally, when considering a location, consider the local hiring pool and employee demographics to ensure a good fit for your business needs.
3. Don't Focus Only on Base Rent.  A commercial real estate advisor can help mitigate unforeseen costs by capping expense stops and CAM charges in your lease. Budgeting for contingencies, including possible rent increases, tenant improvements, utilities, maintenance fees, and property taxes, is essential. Keyser aims to protect your financial interests and ensure your lease terms are structured to minimize unexpected expenses.
4. Don't Renew Without Testing the Market. Even if your business’s initial intent is to renew your lease agreement, reach out to a commercial real estate advisor to show you what other opportunities are available in the market. Keeping an open mind can unveil properties that may be a better long-term fit for your business model and potentially create negotiating leverage through increased competitive pressure on the landlord. Ultimately, this approach empowers you to make well-informed decisions that align with your business goals and ensure a smooth transition when the time comes.
5. Don't Ignore Future Space Needs. As the workforce and workplace flex with the economy and employee demands, create a backup plan in the event your business wants more or less space to accommodate your operational needs. Consider whether the property can accommodate your business's long-term plans, which can be negotiated into the lease agreement as Rights of First Refusal or Expansion Rights. These options provide flexibility and security as your business evolves.

How Can a Tenant-Only Advisor Strengthen the Leasing Process?

A commercial lease should support the business, not simply secure the space. A tenant-only Commercial Real Estate Advisor can help leadership evaluate alternatives, understand market conditions, model occupancy costs, protect negotiating leverage, and negotiate terms around the company's objectives.

Because Keyser represents only tenants and occupiers, our focus remains on helping companies make commercial real estate decisions that support their business strategy.

FAQs About Leasing Commercial Real Estate

What should a business consider before signing a commercial lease?

Evaluate total occupancy costs, location, lease obligations, flexibility, future space needs, property condition, and how the space supports long-term business objectives.

How early should a company begin the commercial leasing process?

Timing depends on the size and complexity of the requirement, but starting early provides more time to evaluate alternatives, negotiate terms, and preserve leverage.

Should a company evaluate other properties before renewing its lease?

Yes. Evaluating market alternatives can help leadership understand current conditions, compare options, and strengthen its negotiating position even when staying is preferred.