Top Deal Points For Negotiating A Lease

Office leases can be complicated and overwhelming to tenants.  Here are some deal points to pay attention to and seek tenant representation if you need help.

Lease Terms: 3 to 7 years

The less money spent by Landlord the shorter the lease term

Landlords prefer longer term leases to amortize their cost and stability

Parking: Covered, structured, reserved, allocation

Make sure the building has enough space to satisfy your needs and the other tenants (4:1,000 or more)

Covered or reserved parking can be an incentive to your employees

High density tenants can become parking "hogs"

Reserved parking usually has a cost but it depends on the market and the building

Six to twelve months of free parking is typical for a building with paid parking

Sublease Option: Company Growth, Acquisition, Downsizing

Allows a tenant to lease the space to another party

Don't let a Landlord limit the ability to sublease space through approval rights, terms, rental rate, etc.

The tenant will still be responsible for all the lease terms including any differences in rent.

Expense Stops: Operating Expenses, Taxes, CAM

Understand the Base Year increases

If the lease commencement is in the last 3 months of the year make sure the Base Year is for the following year

Put caps on all controllable expenses

Rent Concessions: Free Rent, Parking, Tenant Allowance

Free rent is the most common concession

Request 1 month of free rent for each year of your lease

Tenant Improvement Allowance can offset any tenant cost in the buildout

Tenant Improvements - Turnkey

A typical build out should be “Turnkey” meaning the landlord is in charge of all cost and management.

Anything above a typical build out will be tenant’s responsibility either through out of pocket cost, an increase in rent and/or an increase in term.

Expansion Option: Ability To Grow

Ask for a right of first refusal on adjacent space to your space

Easier to expand to adjacent space the relocating.

Expansion rights can be a one time option or an ongoing expansion, the later is more favorable for the tenant.

Termination Options:  You might need it

Termination option should be based on a one time payment by Tenant or if Landlord is not able to deliver to Tenant’s future needs (expansion potential)

An outright termination option is rarely given by Landlord

Now, it still may come at a cost such unamortized tenant improvements and other cost that the landlord has recouped.

Relocation Clause:  Only Benefits Landlord

Tenants should request to not have any type of Relocation Clause

Only agree to a relocation clause if it specifically says tenant will have no additional financial cost and that the relocation space is equal or better than the existing space. 

Landlord needs to cover any moving cost or downtime cost that will impact tenant.

Density Restrictions: Call Centers, Educational, Special Institutions

Avoid a high-density business form occupying the building

High density businesses create more traffic in the building and potential security risk

Parking can become a nightmare for your employees and clients.

Renewal Options: Protect your future

Renewal option protects your space

Alleviate risk in rental rate increases

Have a specific rental not a % of market

Two options of equal to lease term are ideal

Other topics that should be paid attention to our:

Government Shut Downs/Rent Holidays

Building Hours

Weekend Access

Security

Signage

Security Deposits

Access Rights

Indemnity Clause

Personal Guarantees

Cap on Operating Expenses

While a tenant representative can assist and negotiate the lease terms only an attorney can give you legal advice.

 Always start your search or renewal early.  It will give you more leverage if you are not on a tight timeline.

 Knowing the market is important to get the best “market” deal available.

LeaseWithEase specializes in representing local and regional tenants. Negotiate with confidence while saving your company time and money. If your lease is expiring in the next 6-12 months, the time is now to start your search or lease renewal.

The search is free and quick.

Note: Gross rents will vary from month to month and LeaseWithEase always uses real time data.

Use LeaseWithEase to find Dallas Office Space For Rent, Dallas Office Space For Lease, Plano Office Space For Lease, Plano Office Space Rent, Frisco Office Space For Lease, Frisco Office Space Rent, and other office space for lease or rent.