Your lease is one of your most important business contracts.
The space you work out of, what it costs, what you pay for and whether or not you can easily transfer your lease are all huge components of your business. As the lease is a contract you probably defer its contents to your attorney but he/she does not know the current real estate market and have a full understanding of practical lease terms and their ramifications. For example, 1) what are you really paying for? 2) is your lease net or gross? 3) what additional expenses are you required to pay? 4) if you lease 2500sf do you get 2500sf?
Understanding what is in your lease can aid in your overall success as it represents a big expense. When signing a new lease or renewing an existing lease, you should be asking the following questions:
- What is the rent as compared to comparable space in the market?
- What does the rent include and NOT include?
- Is the landlord contributing to my build out or remodeling?
- How much “free” rent am I getting?
These are just a few of the questions you should be asking.
If you have a lease and do not want to move, how do you renew your lease? Regardless of what your lease says the process is always negotiable with the landlord. The key on a lease renewal is to achieve a “market” deal with your landlord. You may negotiate better than what they originally proposed but so what. Getting the best possible deal in the market is the mission. You need to know the market to get that deal. Timing contributes to your leverage with the landlord. If you start the process early enough and can threaten to relocate you can create leverage. If you wait too long the landlord knows you will not move and they WILL take advantage of you.
Finally, and maybe most significant is your lease assignability. If you sell your business can you transfer the lease to the buyer? While you are sitting on the beach do you want to worry about whether the buyer is paying the rent?
These are just a few questions to be asking. Feel free to learn more about these issues and others at medicalanddentalspace.com or contact Chaz Feitel at firstname.lastname@example.org.