Securing your first commercial real estate lease can be scary. Stuart D. Kaplan, partner and practice group leader of the Real Estate Development Group at Blank Rome LLPin New York City, offers these tips:
- Evaluate your space needs. Do you plan to grow your office? Your lease term will likely be for many years, so plan accordingly.
- View a lot of properties. Make sure you're comfortable with the price of comparable spaces before making your final decision.
- Ask for concessions from the landlord. Depending on the strength of the market, you can ask for things like a few months of free rent or a "tenant improvement allowance," which is basically dollars you agree to put into the space.
- Look for hidden expenses in the agreement. Charges above your fixed or base rent, like operating expenses, can surprise novices. They may not be in the term sheet, so ask specifically for this information.
- Don't choose space based solely on the landlord. "There's nothing in the lease that would prevent the landlord from selling to someone else the next day," says Kaplan. "There's a false element of trust."
- Don't review documents on your own. Have a lawyer review the lease.