Commercial lease negotiations can be complicated, especially when considering things like lease terminations and other ways in which a company may need to change their current leasing situation. Negotiating flexible terms in order to handle a variety of needs is important to ensure a company is most protected in the event that circumstances and needs change. This is why a business should always work with experienced tenant representatives. Tenant reps work hard to ensure that a company obtains the most flexible lease terms possible, providing them options when it becomes necessary to give up space, or even take on more.
Lease Termination and Sublet Clauses
Whether it is because business not going as planned, or there is a need to relocate to a different space for other reasons, having options in how to deal with leased space that is no longer needed is important. An agreement on lease termination allowing a lease to end under certain conditions is recommended.
Alternately, the ability to sublease unneeded space rather than terminate the lease, or to bring in income for space not being used, is another option that a business may want to negotiate. In either case, some type of clause that is written into a contract providing a way for a company to give up their unused space is recommended as a protective measure when there is the possibility of either business growth or cutbacks. Tenant reps can help a company negotiate termination and sublet clauses, while watching out for the best interest of the business.
Expansion and Contraction Clauses
Just like they suggest, expansion and contraction clauses give a company the ability to renegotiate their lease at a certain point in time to either increase their leased space or reduce it as necessary. These clauses are especially valuable, since they allow a company to stay in the space they have leased and not be forced out of an ideal location due to expansion needs.
Lease Extensions and Renewals
A lease renewal is treated just like a new lease, which means a company is entitled to have their tenant representatives negotiate rates, improvements, and more. By doing this, a business can continue to get the most for their leasing dollars, even as their needs change over the years. Some companies may even be able to negotiate for lease extensions, where current lease agreements and conditions remain the same, while the terms of the lease are simply extended. Depending on what is more advantageous for a company, tenant reps can help them get the best options through skilled negotiation.
Tenancy and Exclusivity Clauses
For some companies, the businesses leasing space around them are important. Some companies may want to lease only where there are certain other businesses leasing space. Conversely, others may require the promise they will be the only type of business of their kind. With a tenancy clause, a business can be released from their lease when an anchor company leaves. An exclusivity clause protects a company from competition they would face by a similar business moving in next door.
Although there are many important factors to consider when leasing commercial space, some of the more important things that must not be overlooked are the things that deal with lease flexibility and the ability to change a contract as necessary. With the assistance of skilled tenant representatives, a business can prepare for the unknown and protect themselves should they find the need to downsize, upsize, or even relocate when an anchor business leaves. Every company’s needs are different and are subject to change in the future. Working with the right tenant reps, who can help a business prepare for these changes, is the best suggestion to keep a company running smoothly!