What To Look for When Evaluating A Commercial Lease Agreement

Warehouse Spaces for Lease August 14,2023 12:00 AM

Evaluating a commercial lease agreement is a crucial step in the process of leasing a commercial space. This is because the terms of the agreement will determine the cost and conditions under which you will occupy the space and will have a significant impact on your business. In this article, we will provide some tips on how to evaluate a commercial lease agreement to help you make an informed decision.

Read the Lease Carefully Before You Sign

It goes without saying that signing a lease agreement is one of the most important decisions a renter can make. Before agreeing to anything, it is essential to read and understand the entire document. All too often, renters get caught up in the excitement of finding a new place and overlook key details in their lease agreements. Knowing what you’re signing up for can save you from costly surprises down the road.

The terms of your lease are legally binding once both parties have signed on the dotted line, so it’s vital that you know exactly what they entail before doing so. A thorough read-through will help ensure that all your rights as a tenant are respected and that any hidden obligations will be brought to light prior to agreeing to them.

Pay Close Attention to the Lease Duration

When evaluating a commercial lease agreement, there are many important components to consider. One key aspect of the agreement to pay close attention to is the length of the lease. Typically, commercial leases range from three to ten years in length. It is important for tenants to be aware of this so that they can plan accordingly for their business needs over the life of the lease term.

The length of the lease should be determined by how long your business intends on occupying and using the space. If you plan on being in a location for an extended amount of time, it may make sense to negotiate a longer-term lease which could result in lower rent payments overall. However, if you foresee needing more flexibility or have plans for relocation soon, then opting for a shorter-term lease may be preferred as it will allow more freedom and less financial burden down the road.

Carefully Consider Both Monthly Rent Cost and Any Additional Fees

Another important factor to consider is the cost of the lease. This will typically include the base rent, as well as any additional charges, such as property taxes and common area maintenance fees. It is important to carefully review these costs and ensure that they are reasonable and in line with the market.

In addition to the base rent and additional charges, be sure to also consider any potential increases in the rent over the course of the lease. Many commercial leases include provisions for rent increases, either at regular intervals or based on certain conditions, such as the consumer price index. Be sure to understand how these increases will affect your business, and whether you can afford them.

Be Certain You Allowed to Use the Space to Meet Your Business Needs

Another important aspect of the lease agreement to consider is the use of the space and any restrictions that may be associated with it. In particular, tenants should pay close attention to restrictions on the use of the space and make sure they understand them before signing a lease agreement.

For example, a landlord may impose restrictions on how their property can be used or limit access to certain areas. Some landlords may even require that specific types of businesses are not allowed in their premises. It is therefore essential for tenants to read through the terms and conditions carefully before signing, as this will help them avoid potential problems down the line.

Tenants should also ensure that they are aware of any local laws or regulations that might affect how their business operates in the space. For instance, some municipalities may have strict noise ordinances or fire safety requirements that must be followed at all times.

Keep Your Business Needs First and Foremost

Finally, it is important to consider the terms of the lease agreement in relation to your business. With any agreement, hidden obligations can be lurking that weren’t expected or even considered. It is essential that you review all aspects of the lease before signing on the dotted line.

The condition of the property should be carefully examined and documented in order to avoid potential disputes down the road. This includes making sure any needed repairs are noted prior to signing off on anything. Costs associated with maintenance should also be outlined in detail along with who is responsible for each expense. Additionally, special clauses such as eviction procedures or other legal language should not go unnoticed as they can affect both parties if there are future issues surrounding either party’s obligations under the contract.


In conclusion, evaluating a commercial lease agreement is a crucial step in the process of leasing a commercial space. By carefully reading and understanding the agreement, considering the length and cost of the lease, and evaluating the use of the space and its impact on your business, you can make an informed decision and ensure that the lease agreement is in the best interests of your business.