Figuring out what a lease entails can be quite confusing, especially for someone like me who did not know anything about business. But from the past 6 months, I have learned a few things about leases, so I will pass on my knowledge, although not much!
So you have found the perfect spot for your small business and are ready to discuss lease terms with the property manager. What are some few things that you should ask? 1) price per sq footage ( it will be good to know the average price that people are charging in your area). 2) Tenant improvement: how much will the property owner give you to do your tenant improvements in the building. For the most part, the longer the lease term, the more money the property owner should give to the tenant for tenant improvement. 3) Gross lease, double net lease, or triple net lease: Gross lease is when the tenant pays rent and the owner takes care of everything else, which is commonly used in residential properties. Double net lease is when the landlord commonly covers parking, heating and cooling system, and the structural integrity of the building. Triple net lease or True net lease is when the landlord has no responsibility related to building upkeeping. This can be good for the tenant cause they have complete control over the property. A triple net lease can be risky for landlords because tenants may allow the building to fall into dispair. 4) How long is the landlord going to give you free rent for tenant improvements. Usually landlords of commercial buildings will allow 1-6 months of free rent so the tenant can build their business.
That's all that I know for what to look out for during lease discussions. If I am missing something, please leave a comment so other people can be informed as well.
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