Things to consider for your commercial real estate lease

If you’re looking to operate a physical retail store location in Texas, you’ll need to negotiate a commercial real estate lease. Unlike leasing a home or apartment, you may have significant leeway to negotiate terms that fit your needs and budget. For instance, you could negotiate a lease that only requires you to pay a base rent and other limited expenses instead of covering all expenses such as property insurance or maintenance costs.

Study the market

The best way to determine what type of commercial real estate loan terms you might be able to get is to take a look at what similar buildings in the neighborhood are rented for. You may also want to take a look at how much it costs to maintain and operate the property when determining if you are getting the best terms before a lease is signed and executed. Finally, be sure to get a list of all expenses that a landlord is asking you to take care of so that you can create a firm budget ahead of time.

Consider your needs

If a landlord asks you to sign a triple net lease, you may be better off just buying a building instead of leasing. The same might be true if you can afford to pay all of the costs associated with a building whether the landlord requires you to or not.

Similarly, you may not want to buy a building that you don’t have the power to renovate or a building that you’d have to share with others. It may be possible to obtain a clause in your lease that prevents unused areas or adjacent buildings from being leased to a competitor.

A commercial real estate lease governs the terms that you’re required to abide by while operating your retail location. However, you will often have a more lenient agreement than a residential lease would offer. Staying in touch with your landlord may make it easier to make changes when necessary.