Rent: Just One Side of a Commercial Lease Agreement

My blogs for the next week or so will contain excerpts from an article I co-wrote for the ACC Docket, November 2010 edition, titled “Rent: Just One Side of a Commercial Lease Agreement.”  The discussion contained in the article was written for corporate lawyers, but applies to a much wider audience as it describes the importance of careful planning and analysis throughout the leasing process, and also emphasizes the need for the tenant to focus on each provision contained in the definitive lease agreement.  A successful lease negotiation focuses on more than just the base rental amount, as vital components of reducing a company’s occupancy costs include mitigating risks and exposure to unforeseen expenses, maximizing flexibility and operating efficiencies, and aligning the company’s real estate strategy with its overall business plan. 

I hope these postings will be enjoyable to read and informative.  Feel free to call or email, and we’ll show you why we’re Studley!

Negotiating the lease deal

It is amazing how often companies find themselves looking for guidance because an unpleasant surprise has come up during the term of their lease, with the vast majority of such issues costing them significant dollars (that wasn’t included in their budgets) in attorneys’ fees and costs to remedy the situation.  Often such surprises are due to having signed a poorly understood or poorly constructed lease agreement and could have easily been avoided.  This is especially true of smaller, less sophisticated tenants who, for whatever reason, sign the landlord’s “Standard Form Lease” with few, if any, changes. 

A lease is much like a partnership agreement in that it governs a business relationship that could last for many years.  When everything goes as planned, most leases will serve the parties well but the true test occurs when there are hiccups in the relationship.  If the lease has not been carefully drafted, a hiccup can become a major problem.  Tenants often lose sight of the fact that the “Standard Form Lease” represents the landlord’s wish list, and if not appropriately modified, will likely not serve their interests when issues arise. 

Most tenant rep firms do not fully protect their clients throughout the entire leasing process, as achieving a favorable deal includes the careful negotiation of the definitive lease agreement.  This is where our Studley team differs from the rest.  We’d be happy to show you why we’re Studley!