Analyzing a Commercial Real Estate Lease

I am often amazed by the number of landlords and tenants who find themselves loo
king for guidance after an unpleasant experience that has cropped up from a real
estate lease. Often however, these surprises are as a result of a poorly unders
tood or constructed lease agreement. Commercial real estate for lease however ne
ed not end up with such bad experiences. When landlords and tenants take the tim
e to understand the terms and conditions of a lease agreement, they will often a
void the potential heartache.
The parameters set out in a lease agreement essentially lay the foundation for a
business relationship. Thus a lack of understanding of these rules and regulati
ons is much like entering a partnership agreement and not being aware what it en
tails. On the other hand, a lease that is not carefully drafted can become a maj
or problem should an unpleasant situation arise. Commercial real estate for leas
e should thus have more than just the Standard Form Lease agreement issued by the
landlords since these represent only the landlords wish. On the other hand, any c
hanges to the lease requested by the tenant should be clearly understood so that
they do not cause difficulties for the landlord in the future.
A commercial real estate for lease should first evaluate the tenants own needs. S
ome of the key components that such a lease should take into consideration inclu
de the space requirements, the market and construction requirements if permitted
. Analyze the needs of the client will require an awareness of the proposed loca
tion, the amenities available and the staffing projections. To help coordinate a
ll of this, it might be necessary to establish a project team that would include
the tenant, the landlord and probably a commercial real estate broker. Complex
requirements will likely require a greater number of participants. Before initia
ting a commercial real estate for lease market survey, the tenant will need to p
re-determine the square footage requirement in detail. This evaluation will also
help in determining the space components that will be required.
Once all the tenant needs have been determined, a tour of candidate buildings ca
n then be made and a building comparison made on how favorable each building com
pares with the tenants needs. Commercial real estate lease also require that a te
nant write a Request For Proposal. This serves the same capacity for a tenant as
a Standard Form Lease does to a landlord. When landlords and tenants are aware of
the issues to be evaluated in a lease agreement, both parties can avoid a bad e
xperience in the future.