When entering into a commercial lease agreement, many business owners and potential tenants may be familiar with some of the general business issues involved. These basic lease terms include:
- the rental rate
- a build-out allowance
- operating expenses
- the length term of the lease
In addition to these basics, however, there are many more complex terms involved in a commercial office lease that involve complicated negotiations and demand a seasoned touch. While some business owners may choose to go it alone, the guidance of a qualified team, including a tenant representative and legal counsel, can make a big difference in parsing these finer points.
The Finer Points of Commercial Office Leases
To give you an idea of the additional complexities involved in an office lease, let’s look at some of the other points which can come up during negotiations.
Green lease issues
Many businesses are endeavoring to undertake a more responsible approach to operations and trying to implement “greener” practices. As such, many tenants seek to include environmentally responsible clauses within a lease, addressing:
- reduced consumption
- safe and efficient removal of waste
- more sustainable work environments
With the high prioritization of advanced communications in business today, many businesses need to pay special attention to lease details relating to the set-up of their communication system. These include:
- Access to risers – covering the tenant’s ability to access and implement the space neede for fiber optic cabling.
- Access to rooftops – addressing the installation of satellite and microwave antennae on a building’s roof space.
- Implementation of redundancies – creating a back-up power supply to computer systems in case of a building power failure.
These crucial additions can come at additional costs, so negotiating these finer points can make a sizable difference to a company’s bottom line. Landlords may also wish to exert their right to approve each such implementation, so a tenant should make sure that they discuss thoroughly the implementation and use of such additions.
These are just some of the issues that can come up in an office lease negotiation. Making sure that you are well-briefed and prepared to negotiate these issues, ideally with the aid of a professional real estate team can make a big difference to your lease over the long term.
Senior Vice President at Colliers International, based in Houston, Texas.