Negotiating the right lease terms can make a big difference to your
LasVegasRealEstate.com asked our Preferred Partner for Commercial Real Estate, Jack Woodcock with The Woodcock Real Estate Group, one of Berkshire Hathaway HomeServices – NV Properties’ largest and most successful commercial leasing teams, to provide us with some insight into their commercial leasing success. Jack outlined the following thoughts for LasVegasRealEstate.com readers:
We have represented many commercial tenants over the years and from that experience we can share some best practices says, Jack Woodcock. Before we get to a few specific recommendations, let’s start with an important first step – if you are considering the lease of commercial property, be it office, industrial, flex, retail, or land, get yourself an experienced commercial realtor.
Lease contracts are generally written on the landlord’s form, and they are long-term agreements. An experienced commercial realtor can walk you through the small print and details and compare costs and contingencies to industry norms. Here are a few more tenant recommendations from Jack Woodcock:
We refer commercial clients to the Woodcock Real Estate Group for very specific reasons: Service, Integrity, and Market Knowledge. Click here to learn more: Preferred Partner: Commercial Realtor
How many years is the original term of your lease?
Do you have the right to extend the term of your lease?
How will the lease extension impact your lease rate?
Tenants should give a lot of thought to these three questions, says Jack Woodcock. If you’ve not negotiated extension options and terms on the front end of the contract, don’t assume your landlord will be willing to negotiate with you for a lease extension at the end of your original lease term. You’ve just put years into building your brand and getting clients to your front door – make sure you don’t drive up next year to find a similar business that’s not yours.
The lease agreement should very clearly spell out who is responsible for maintenance and repairs. In most commercial lease agreements, the landlord is responsible for maintaining the building’s common areas, the roof, structural elements, and building systems servicing more than one tenant.
But, you might be surprised to learn that many commercial leases are written with the tenant bearing responsibility for HVAC maintenance and servicing. This is especially true if it’s a single tenant building lease. A small detail that, if missed or not budgeted for, can become a significant challenge for a business owner says, Jack Woodcock.
The commercial space you lease should be delivered in compliance with all laws and with all building systems in good working order and repair. The commercial lease should clearly delineate the work being done by each party to prepare the space for occupancy and any deadlines for completing such work.
Imagine signing a commercial lease and not being able to open your door for business when planned because your landlord didn’t properly wire that all-important tech closet.
Another important factor, says Jack Woodcock, is tenant improvement allowance, and how the payout works.
We highly recommend that a prospective tenant documents the condition of the commercial unit at move in and move out. A written account can help you defend against wrongful damage charges says, Jack Woodcock.
In order to legally collect a deposit, landlords need to provide tenants with a move-in checklist. Fill out the checklist thoroughly to document pre-existing damages at move in. The checklist must be signed by both the landlord and tenant.
While landlords are not required to do a move-out walk-through, one can, and should, be negotiated into the lease agreement. This gives you a clearer understanding of potential lease-end costs.