What to think about before signing a commercial lease

What to think about before signing a commercial lease

| Aug 13, 2020 | Business Formation |

Companies in Georgia and throughout the United States might find that they need to lease a dedicated office or warehouse space to operate efficiently. However, there are many variables that organizations should consider before signing a lease agreement. These variables may include the length of the lease as well as any terms that might hinder your company’s ability to operate.

Opt for shorter lease terms whenever possible

While there is no such thing as a standard commercial lease, some commercial landlords want tenants to sign leases that last for as long as a decade. Ideally, you will negotiate a term of no more than two years. At a minimum, attempt to negotiate out clauses that allow you to move on from a location if your company is struggling or has outgrown the current building. An attorney may be able to help you negotiate a contract that meets your needs while also protecting the landlord’s interests.

It may be better to buy a building

Unless you are in the retail or hospitality industry, renting a building may not make your company more profitable. Furthermore, your landlord may attempt to raise the company’s rent if the business is successful. Buying a building means that you have some level of cost certainty and an asset that may appreciate in value over time. In some cases, a building might become your organization’s most important and valuable asset.

There may be a variety of risks and benefits to acquiring commercial real estate for your company. Ideally, you will consider the potential short and long-term ramifications of signing a lease or buying a building before doing so. An attorney may be able to help review a lease deal or purchase contract before it becomes official to ensure that it meets your company’s needs.