A commercial lease is often a business's largest fixed commitment, and unlike residential tenancies there's very little consumer protection — the terms are whatever you negotiate. Understanding the structure before you sign is essential.
Base rent is only part of the rent
Most commercial leases are "triple net" (NNN): on top of base rent you pay additional rent — your proportionate share of property taxes, insurance and common-area maintenance. Always ask for the current additional rent per square foot, not just the base, so you're comparing real occupancy cost.
Term, renewal and the option
Landlords want term; you want flexibility. Negotiate:
- A term that matches your business plan, not the landlord's amortization
- A renewal option at a defined rate or market rate, so you're not held hostage at expiry
- Early-termination or assignment/sublet rights if your needs change
Tenant improvements
Fitting out a space is expensive. A tenant improvement (TI) allowance — a per-square-foot contribution from the landlord toward your build-out — is standard and negotiable, especially on longer terms. Get the scope and who owns the improvements at end of term in writing.
The fine print that bites
- Personal guarantees — landlords often want one; try to cap or burn it off over time
- Demolition/relocation clauses — can end your lease early for redevelopment
- Use and exclusivity — make sure your permitted use is broad enough, and consider an exclusivity clause so a competitor can't move in next door
- Restoration obligations — what you must return the space to at the end
Get representation
Landlords have professional leasing agents; tenants should too. Tenant representation typically costs you nothing directly and routinely pays for itself in improved terms.
Looking at space? Start a commercial enquiry and we'll represent your side.