Leasing Tricks to Avoid a Landlord Scare

Updated: Dec 23, 2018


Halloween is almost here and while we are getting ready for spooks and fun, leasing a property can be tricky. Here at Estate Match Realty, we pierce the corporate veil and help you avoid a leasing scare. Many start-ups come to us for their first brick-and-mortar venture, never previously seen a lease or its provisions before, well except maybe for an apartment lease. A commercial lease is, however, a completely different ball-game. In our article, AIR Forms, we discuss some of the more recent changes to commonly used real estate contracts. Other clients have years of business experience, but rely on our expertise and problem solving skills.


Here we share five (5) tips for leasing commercial space that the Landlord may not want you to know:

1. Market Rents May Vary

Like purchasing a home, market rents for retail space may vary based upon factors such as square footage, type of business, improvements, and condition of the space. While negotiating the Fair Market Value of an existing lease, one Landlord had their agent pull different comparables from CoStar, a database platform. However, the comparables were for a completely different type of center. By providing market knowledge, new leases, and terms, we were able to help the tenant negotiate a more favorable market rent for the next 5 years.

2. Location Matters

Location within a Center or Building can have an impact on your sales and also affect the market rent as well. For instance, if you are located on the prime ground floor or corner, the rent would likely be higher given an increase in visibility. Additionally, for retailers, it is especially important to think about the other business that will be next to you. A coffee spot may like having a yoga studio next door as a compliment.

3. Exclusives Can Be Negotiated

A coffee spot wouldn't want Starbucks going into the same Center. By using creativity to negotiate an exclusive, a business can add language that they would be the only coffee operator in the Center. All too often businesses do not think about the "Use" provision of their lease, or how this can affect their sales in the long-run.

4. Concessions to Ask For

Every lease deal has the opportunity to be negotiated: whether you are looking for some free rent, money (called Tenant Improvement Allowance), or even have the Landlord perform some work for you. Concessions vary for each Landlord, and as well as each space.

5. Hire a Tenant Broker

And of course, hire a Tenant Broker. In our article, a Startup's Guide to Leasing, we explain that the Broker is your advocate. "He or she will be able to guide you through the leasing process, market comparables, market trends, negotiate terms, and find properties not yet on the market." Just like in residential real estate, the commission is often split and paid by the Landlord, so it becomes a no cost value.

At Estate Match Realty we specialize in commercial real estate and provide advice based on best business practices to advise you accordingly. We provide solutions, negotiating power, and years of experience to make the leasing process less scary.

#leasing #startup #contracts

Los  Angeles, CA

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