Real Estate Investment Real Estate Investing Guide for Beginners in Newca | Page 6

How to Negotiate the Terms of a Commercial Lease
Once you have found the perfect space, you still need to make an offer, and sometimes a
counter offers to negotiate the best deal on a commercial lease. Never accept any offer
without asking for at least something better. It is standard and customary in commercial
leasing to negotiation - the landlord expects it and usually will inflate rent or fees in some way
expecting to come down a bit in price.
 How to Negotiate CAM Fees in Commercial Leases: Common Area Maintenance (CAM)
fees are dreaded by most tenants, and misunderstood by even more. But CAM fees
are often negotiable. The larger the space you rent, the more likely you will be able to
negotiate CAM fees and any associated administrative fees. However, no matter how
small the space is, never accept the terms of any lease without asking for a better deal.
 Get Initial Asking Terms in Writing: If a landlord or leasing agent simply tells you the
terms, ask for something showing the terms in writing before you submit a
counteroffer. If they are reluctant to offer a letter, ask for an email or a copy of the
listing for space (which will contain at least the basic leasing information).
 Preparing An Offer or Counter Offer Letter: A counter offer should be presented from
your business, not from you personally, even if you own a sole proprietorship.It is
helpful to remember that an offer letter is a sales pitch. You are asking for different
terms than what was presented to you - terms that are more in your favor and you
want the landlord to see you and your business as a good choice worthy of
concessions.
 Listing Your Leasing Terms in an Offer or Counter Offer: There are some key things you
should include in the terms of your offer. For example, you want to make clear the
rate you will pay, the length of the lease, renewal options, as well as list any build-outs
or improvements that you want the landlord to do, or, that you will do once you move
in, and, when you will move in.
 If you need help preparing your offer letter, Women in Business has a Sample Offer
Letter that you can refer to as a guideline for putting your terms into writing.
Putting it All Together
Looking for space should be exciting and fun, not scary. Do not be shy about taking notes,
measurements or pictures of any space you look at. These things can help you research and
compare more options after you leave the site.
Perhaps the two most important things to remember are almost all leases are negotiable in
some way, and, commercial leasing is complicated and landlords expect you to ask a lot of
questions. In fact, when it comes to leasing, the more questions you ask, the more likely a
landlord is to deal straight with you.
Asking questions and being assertive will help you get the best deal. And when it comes to
signing the actual lease, if you do not understand something, it pays to get a lawyer or trusted
realtor to explain the terms to you.