Are you looking for commercial space for your business? That’s great. The right commercial space is pivotal to your business’s success. However, before you sign the contract, you must understand how commercial leases work.

Unlike residential leases, which are highly regulated, a commercial lease is the only protection your business has against a rogue landlord. Here is the information you need before you sign a commercial lease. 

How To Lease Commercial Real Estate

The commercial leasing process is the same as the residential leasing process. It’s a challenging process that involves actively looking at and assessing properties. Depending on your desired space, it can take several days, weeks, or months. Here are the steps involved in finding a commercial property for lease. 

Define your needs

Start by creating a list of your requirements. This should include the size, layout, location, amenities, and budget. 

Search for potential locations

With the space you want, look for commercial real estate for lease. You can look around in person, utilize online listings, or seek help from an experienced commercial real estate broker.

Evaluate and negotiate

Once you find promising options, assess lease terms and negotiate for favorable terms. 

Secure the lease

If satisfied with the terms, submit a lease application and other required documents. Upon approval, finalize the lease by signing and providing deposits. Both you and the landlord should get a copy of the commercial lease agreement. 

How Does Commercial Real Estate Leasing Work

A commercial lease is a legal agreement between a landlord and a tenant outlining the terms for occupying a commercial property for a specific period. The agreement content will depend on the type of commercial lease you enter into. According to an experienced commercial real estate broker, here are the common types of commercial leases.

Base rent

Base rent is the minimum monthly payment the tenant makes to the landlord, independent of any additional fee that may be included in the agreement. 

Net lease

This lease shifts more responsibilities to the tenant in addition to rent. It can be categorized into three types of leases.

• Single net lease (N): Tenant pays base rent and property taxes.
• Double net lease (N): Tenant pays for property taxes, insurance, and base rent.
• Triple net lease (N): Tenant pays for property taxes, insurance, maintenance, and base rent. 

Gross lease/full service

In a gross lease, the tenant pays a fixed monthly rent that includes most operating expenses like utilities, property taxes, maintenance, and insurance.

Percentage lease

The rent is based on a percentage of the tenants’ sales revenue.

How To Find Commercial Real Estate for a Lease

Finding the right commercial real estate to lease for your business takes work. Below are strategies you can use. 

Utilize online listings

Many real estate agents post vacant properties online, either on their websites or social media pages. Websites like LoopNet and CoStar offer extensive listings with search filters to narrow down options based on location, size, and budget.

Work with a commercial real estate broker

An experienced commercial real estate broker is your best bet in finding a property sooner. They understand the market better and have access to listings that are not publicly available. However, remember that you’ll have to pay for their services. 

Target your ideal area

If you know where you want to set up your business, walk or drive around the area to see if there are vacant rental spaces. Look for “For Lease” signs and gather information on available properties. 

Ask other business owners

Ask business owners if there is available space in their location. 

Final Thought

Finding a suitable commercial space for your business is crucial. However, before you sign the lease, learn how commercial leases work to help you secure a deal that benefits your business. 

Jane