Choosing the right commercial lease terms isn’t an easy task for a growing company. Warehouse tenants want the peace of mind and concessions that often come with signing long-term leases, but they also want the flexibility of being able to move if the business outgrows the current warehouse space. As a result, business owners need to consider both current and future needs when negotiating lease terms.
But what are the typical commercial lease terms to expect at the start of a negotiation? And what factors should a tenant consider when it comes to the length of the lease? This guide will help tenants understand typical commercial lease terms in order to negotiate a lease that works well for their company.
Factors to consider in commercial lease terms
There are several considerations for a tenant when negotiating lease terms:
Finding the Right Balance
A successful commercial lease is an agreement in which the landlord and the tenant are both satisfied with the terms. Tenants should try to include options to renew and/or expand the lease, so it can cover a longer period if necessary. An example would be a five-year lease with a three- to five-year option to renew.
In the end, it’s all about finding the right balance. If the business is new or you’re unsure of its future, aim for shorter business lease terms. But if the business is stable and makes consistent sales, signing a longer-term lease will save money. It can also provide peace of mind by knowing you won’t have to look for another space in the foreseeable future.