So you have found your commercial space and negotiated the basic terms and conditions now you are ready to begin reviewing the commercial property lease agreement that will be drafted by the landlord. Or………Are you ready?
Whether you are leasing retail, office, or warehouse space you will be required to sign a commercial lease agreement that in most cases is drafted by the landlord's attorney and it will be in heavy favor of the landlord.
What Does a Typical Commercial Lease Agreement Look Like?
- In most cases if you are dealing with an institutional landlord you will have to use their standard commercial property lease agreement which are typically 30-50 pages long. All the terms and conditions are negotiable however those commercial leases will be heavily favored with the landlord. If you are a small tenant don't expect them to agree to many changes. If you are a larger tenant leasing 10,000 sf or more you typically have a little more leverage in negotiating lease comments, especially if your company has AAA credit.
- If you are dealing with a small local investor they will typically use the standard Texas Association of Realtors Commercial Lease Agreement template (TAR-2101) which is only 15 pages long. It's also one of the most easiest commercial lease agreements and has very fair terms and conditions for both the landlord and the tenant. Always try to get the landlord to use the TAR template if you can however in most cases it's not negotiable as to which form is used unless you are a very big company.
Table of Contents for an Institutional Commercial Lease
This will give you an idea of what terms and conditions there are in the lease
Table of Contents for a TAR Commercial Lease
In summary make sure to not take negotiating the lease contract for granted. They are negotiable however don't just ask for concessions for no apparent reason. Make your request based on you business needs and objectives. If you need help call an attorney that specializes in commercial real estate lease contracts. Don't hesitate to contact us if you have any questions about commercial property rental contracts.