{"id":9083,"date":"2025-10-08T09:00:04","date_gmt":"2025-10-08T13:00:04","guid":{"rendered":"https:\/\/visuallease.com\/?p=9083"},"modified":"2025-10-09T16:23:46","modified_gmt":"2025-10-09T20:23:46","slug":"a-complete-guide-to-commercial-lease-negotiations","status":"publish","type":"post","link":"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/","title":{"rendered":"A Complete Guide to Commercial Lease Negotiations"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Factors_that_Affect_Lease_Negotiation_Power\" >Factors that Affect Lease Negotiation Power<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#How_To_Prepare_For_Negotiating_a_Commercial_Lease\" >How To Prepare For Negotiating a Commercial Lease<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#1_Identify_Opportunities_to_Negotiate_Within_Commercial_Leases\" >1. Identify Opportunities to Negotiate Within Commercial Leases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#2_Evaluate_Your_Existing_Commercial_Leases\" >2. Evaluate Your Existing Commercial Leases<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#What_to_Look_for_in_Current_Leases\" >What to Look for in Current Leases<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#3_Seek_Expert_Advice\" >3. Seek Expert Advice<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Consult_a_Broker\" >Consult a Broker<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Work_with_an_Attorney\" >Work with an Attorney<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Mistakes_to_Avoid_During_Commercial_Lease_Negotiations\" >Mistakes to Avoid During Commercial Lease Negotiations<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Overlooking_Hidden_Fees\" >Overlooking Hidden Fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Ignoring_Renewal_Terms\" >Ignoring Renewal Terms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Failing_to_Negotiate_Tenant_Improvement_Allowances\" >Failing to Negotiate Tenant Improvement Allowances<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Tips_for_Negotiating_Favorable_Commercial_Lease_Terms\" >Tips for Negotiating Favorable Commercial Lease Terms<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Leverage_Multiple_Offers\" >Leverage Multiple Offers:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Request_Rent-Free_Periods\" >Request Rent-Free Periods:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Emphasize_Long-Term_Value\" >Emphasize Long-Term Value:\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Negotiating_a_Commercial_Lease_and_Accounting_Software\" >Negotiating a Commercial Lease and Accounting Software<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/visuallease.com\/a-complete-guide-to-commercial-lease-negotiations\/#Which_alerts_help_prevent_costly_auto%E2%80%91renewals_or_missed_termination_windows\" >Which alerts help prevent costly auto\u2011renewals or missed termination windows?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n[vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]<span style=\"font-weight: 400\">We\u2019re diving into the <\/span><a href=\"https:\/\/visuallease.com\/compliance\/gasb-96\/\"><span style=\"font-weight: 400\">intricacies of GASB 96<\/span><\/a><span style=\"font-weight: 400\">, a significant standard that government entities need to adopt, now that following the implementation of <\/span><a href=\"https:\/\/visuallease.com\/compliance\/gasb-87\/\"><span style=\"font-weight: 400\">GASB 87<\/span><\/a><span style=\"font-weight: 400\"> has been rolling out for some time.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For most companies, leases and operating costs are usually the second largest expense behind payroll. Yet, after the initial negotiation, companies often don\u2019t keep track of their lease terms or obligations, and that can mean missed opportunities, overbilling and wasted time.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Because leases are such a big investment, the ability to negotiate or renegotiate a lease is a critical part of managing business expenses. Negotiating a commercial lease requires understanding lease components and their implications, and then using that information to negotiate the best lease terms for your business.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Factors_that_Affect_Lease_Negotiation_Power\"><\/span>Factors that Affect Lease Negotiation Power<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400\">The amount of flexibility you have when negotiating a commercial lease often depends on the circumstances. For instance, if it is close to the end of a lease term and your landlord wants you to renew, you may have an opportunity to renegotiate a lower cost or other favorable terms.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Other things that may affect your ability to negotiate a commercial lease include the size and value of the leased assets. For example, you may have some leverage to negotiate with prospective landlords if you are looking for:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Prime locations for multiple retail stores<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Significant square footage for warehousing, a showroom or manufacturing facilities<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Multiple office spaces to accommodate doing business in different locations<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">The ability to negotiate a lease also depends on the flexibility of the property owner or provider. A landlord who is anxious to fill a vacancy may be willing to negotiate an <\/span><a href=\"https:\/\/visuallease.com\/understanding-lease-incentives-why-theyre-important-and-accounting-considerations-under-asc-842\/\"><span style=\"font-weight: 400\">incentive<\/span><\/a><span style=\"font-weight: 400\"> for you to lease, such as a generous <\/span><a href=\"https:\/\/visuallease.com\/tenant-improvement-allowance-accounting-for-landlords\/\"><span style=\"font-weight: 400\">Tenant Improvement Allowance<\/span><\/a><span style=\"font-weight: 400\"> (TIA) for customizing an office space to your needs.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Renegotiation of a lease in the middle of a lease term could be triggered by a hardship of some kind, such as a distressed market, a significant business disruption or even bankruptcy. In these cases, lessors may be more inclined to negotiate so that they get something rather than nothing.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For example, if you lease a large amount of square footage or a highly visible location in a mall or office building, the landlord may work with you on desirable lease terms to avoid having the space sit empty.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_To_Prepare_For_Negotiating_a_Commercial_Lease\"><\/span>How To Prepare For Negotiating a Commercial Lease<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400\">A great way to prepare for negotiating a new contract or renegotiating with current lessors is to review your existing <\/span><a href=\"https:\/\/visuallease.com\/4-common-risk-areas-found-in-a-lease-portfolio-what-to-know-and-how-to-avoid-them\/\"><span style=\"font-weight: 400\">lease portfolio<\/span><\/a><span style=\"font-weight: 400\">. It can help you get a good grasp of your obligations under<\/span><a href=\"https:\/\/visuallease.com\/understanding-different-types-of-commercial-leases-exploring-triple-net-and-pass-through-leases\/\"><span style=\"font-weight: 400\"> different leases<\/span><\/a><span style=\"font-weight: 400\">, which lease terms benefit you (or not) and how much flexibility there may be for negotiation.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If you position yourself as well-informed, understanding of your leasing options and how they relate to the evolving needs of your business, you can ultimately secure a better deal and earn back a portion of your occupancy costs.<\/span><span style=\"font-weight: 400\">Here are three helpful tips to consider when preparing to negotiate a commercial lease:<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Identify_Opportunities_to_Negotiate_Within_Commercial_Leases\"><\/span>1. Identify Opportunities to Negotiate Within Commercial Leases<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">In general, negotiation plays a bigger role in commercial leases than in residential or consumer leases.<\/span><\/p>\n<p><span style=\"font-weight: 400\">That\u2019s because:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Companies often have needs specific to their business, such as the way a space is configured or special requirements for utilities and other features<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Lessors may be motivated to accommodate those needs to help seal the deal<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">In addition, businesses are more likely to lease larger quantities of equipment, vehicles and other assets than a consumer would. Although these leases often require customized contracts based on individual companies\u2019 needs, most commercial leases include some common terms and standard boilerplate language.<\/span><\/p>\n<p><span style=\"font-weight: 400\">These terms and language might be negotiated at the beginning of a lease and then automatically inserted each time the contract renews, with little or no changes over time. However, there are a few factors that can help determine the flexibility and ability to negotiate lease terms.<\/span><\/p>\n<p><strong>Lease Clauses in a Post-Pandemic, Hybrid Work World<\/strong><\/p>\n<p><span style=\"font-weight: 400\">As the world recovered from Covid-19, <\/span><a href=\"https:\/\/visuallease.com\/corporate-real-estate-strategy-a-comprehensive-approach\/\"><span style=\"font-weight: 400\">corporate real estate planning<\/span><\/a><span style=\"font-weight: 400\"> became more complicated than ever. Businesses across all industries continue to be in cash-conservation mode, looking to cut costs and remain agile in response to economic uncertainties.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Now, many leases directly consider and may include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">A pandemic clause, clarifying the rights and obligations of both parties in the event of unforeseen circumstances, such as future pandemics or other force majeure events<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Health and safety protocols, specifying the measures each party must take to ensure a safe and healthy working environment, including sanitation, cleaning, and compliance with health guidelines<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Dispute resolution for pandemic-related issues, establishing a clear process for resolving disputes related to pandemic-related matters, such as rent abatement due to government-mandated closures.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Government assistance coordination, describing how parties will cooperate in obtaining and managing government assistance programs that may be available during times of crisis.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Even more so, there is now an emphasis on \u201choteling, an office arrangement where employees don\u2019t have assigned workstations and instead reserve or use available workspaces temporarily, as well as spaces created with collaboration in mind, such as huddle rooms, team neighborhoods, and social zones.<\/span><\/p>\n<p><span style=\"font-weight: 400\">These may be incorporated through flexibility in space utilization <\/span><span style=\"font-weight: 400\">clause<\/span><span style=\"font-weight: 400\">, allowing for flexibility in the use of space, potentially permitting tenants to adjust the layout or configuration based on changing needs or social distancing requirements, or through a negotiated tenant improvement allowance to help offset the expenses associated with incorporating this new office needs.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The widespread effects of the COVID-19 pandemic had a strong impact on both <\/span><a href=\"https:\/\/visuallease.com\/what-are-the-roles-of-lessors-and-lessees-in-lease-accounting\/\"><span style=\"font-weight: 400\">lessees and lessors<\/span><\/a><span style=\"font-weight: 400\">. On one hand, landlords whose properties were affected wanted to recover as much rent as they could. At the same time, many tenants were looking for some form of relief from their rent obligations and experienced some level of un-occupancy to their corporate real estate leased properties due to office closures. Still, nearly half (47%) of the companies paid full rent on unoccupied properties, and a small fraction (8%) paid no rent. Regardless, more than half the companies planned to ask landlords for some rent relief, such as application of their security deposit or a <\/span><a href=\"https:\/\/visuallease.com\/how-to-handle-lease-concessions-deferrals-abatements-and-other-modifications\/\"><span style=\"font-weight: 400\">rent abatement, reduction or deferral<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Tenants have looked to their leases for clauses like force majeure, casualty or business interruption to save money on rent.<\/span><\/p>\n<p><span style=\"font-weight: 400\">However, these clauses had not been commonly found to apply to COVID-19, given it was unusual to include specific language about a pandemic in lease clauses before the pandemic. However, that is something that will continue to change in the future through commercial lease negotiations.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Alternatively, some tenants and landlords worked together during the pandemic on lease negotiations to ensure that both could stay in business during and after the crisis, and the landlord could continue to collect revenue from assets.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Evaluate_Your_Existing_Commercial_Leases\"><\/span>2. Evaluate Your Existing Commercial Leases<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Your existing leases are a valuable source of information that can help your business negotiate new leases or renegotiate existing agreements.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Any lease that has been customized to your business needs provides an opportunity for you to identify lease language that has worked in your favor. Moving forward, you can choose to establish that language as a standard to use in new leases or renewal negotiations.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Conversely, if existing leases contain language that has not worked well for your business, you can try to avoid those terms in new contracts or renegotiate them at the time of lease renewal.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"What_to_Look_for_in_Current_Leases\"><\/span><span style=\"font-weight: 400\">What to Look for in Current Leases<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400\">Naturally, you want to know what your rent and other lease payments are, but you also want a clear picture of what you are getting for the money. For example:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">How many offices or how much space do you lease from the same landlord?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">What is your cost per square foot?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Is the cost based on occupied space? Or on total square footage?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Is your rent comparable to what other lessees in the building are paying?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Is your monthly payment comparable to or better than the current market rates?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Are you paying for<\/span><a href=\"https:\/\/visuallease.com\/unraveling-common-area-maintenance-cam-charges-a-comprehensive-guide\/\"> <span style=\"font-weight: 400\">common area maintenance (CAM)<\/span><\/a><span style=\"font-weight: 400\"> and if so, how?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Are there other shared costs (such as water or other utilities) and if so, are you paying more than your fair share?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">In addition, you should look at your leases to determine whether your termination rights and renewal terms are favorable to your business. How easy is it for you to get in or out of leased spaces?<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Is there a \u201clease kickout,\u201d or a threshold that allows you to terminate a lease if the location is not operating profitably?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Is there a clause that allows you to terminate the lease on a retail location if there is a significant reduction in foot traffic or if an anchor store closes?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">If you have multiple leases and critical dates with the same landlord, can you trade off and move locations to make the best use of all the leased spaces?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Lastly, you should know where you are in your current lease terms, to be aware of automatic renewals, deadlines you must act on and possible opportunities to renegotiate before you renew.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For instance:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">If you have several leases with the same landlord, such as space in multiple offices or malls, how much of your portfolio is about to expire? If a large number of leases are involved, the upcoming expirations may give you significant leverage in negotiations.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Are your lease obligations<\/span><a href=\"https:\/\/visuallease.com\/accounting-for-long-term-short-term-and-month-to-month-leases-under-asc-842\/\"> <span style=\"font-weight: 400\">short-term<\/span><\/a><span style=\"font-weight: 400\"> or long-term? If they are short term, you may soon have a chance to revisit lease language and make changes that will benefit your business.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Seek_Expert_Advice\"><\/span>3. Seek Expert Advice<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Engaging with professionals, such as <\/span><a href=\"https:\/\/visuallease.com\/why-real-estate-brokers-need-lease-accounting-software-solutions\/\"><span style=\"font-weight: 400\">real estate brokers<\/span><\/a><span style=\"font-weight: 400\"> or lawyers, can help you make smarter, more informed decisions about your leases. Lease experts can provide sound advice and help you better interpret and understand lease language, the current market conditions and your overall commercial lease negotiation options.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Consult_a_Broker\"><\/span><span style=\"font-weight: 400\">Consult a Broker<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400\">Brokers are not experts in lease documents and legality. However, they can provide insights about the marketplace to help you decide whether to invest in a particular lease. For instance:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Does it make sense to sign a long-term lease at current prices, or are prices likely to come down further?<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Do current lending rates make buying a better option than leasing in some markets?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">A broker can perform a market analysis, which includes the typical pricing in a given area. In addition, brokers often know the lessors and are familiar with their business and reputation, added information that can be helpful to you as a potential lessee.<\/span><\/p>\n<p><span style=\"font-weight: 400\">When you work with a real estate broker, they can help you better understand the current <\/span><a href=\"https:\/\/visuallease.com\/understanding-real-estate-market-cycle-for-cre-market-analysis\/\"><span style=\"font-weight: 400\">commercial real estate market<\/span><\/a><span style=\"font-weight: 400\"> and what is happening in neighboring communities.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For example, in the aftermath of a pandemic like COVID-19, a broker can tell you if there have been rising vacancies and falling rents in certain locations. Those are trends that may open the door to negotiating with owners who are eager to have their properties occupied and generating revenue.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The same is true for equipment, vehicles and other frequently leased assets. There, brokers can tell you if prices are down or new stock is not moving, possibly giving you an opportunity to negotiate a price or opt to buy while the market is soft.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Additionally, there are brokers who specialize in meeting different needs based on the health of a business and its goals. For instance, there are real estate brokers who help companies lease high-end spaces. There are also brokers who help companies during situations such as severe market downturns or bankruptcies.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Still, remember that brokers are not experts in the legalities of lease language. Therefore, you should consult with an attorney regarding any lease.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Work_with_an_Attorney\"><\/span><span style=\"font-weight: 400\">Work with an Attorney<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Before you commit to a lease, whether it is new, renewed or renegotiated, you should always work with an attorney. He or she can identify the high and low liability aspects of the lease and help make sure that you:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Get the best terms in legal protections<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Limit your risks from a casualty and insurance standpoint<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Understand the boilerplate language often included as standard in leases (such as waiving the right to a jury trial)<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Know what all your obligations are according to the lease and agree with those terms<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">In commercial lease negotiations, an attorney can ensure that a lease includes ideal language to protect your interests. This adds a level of refinement and enforceability that only a legal expert can provide.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Unlike a broker or other layperson, an attorney has the expertise to guide you through negotiations and manage complex lease language such as casualty and force majeure clauses. Just as you should always consult an attorney before signing a new contract, it is also important to have an attorney review the documents for lease renewals and renegotiations. Additionally, there may be times when it is appropriate to use an attorney to revisit previously negotiated boilerplate language.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For instance, when you work with the same landlord for a long period of time or a multiple-lease portfolio, you tend to negotiate some standard language and then update the lease as needed in areas such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Business terms<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Location-specific charges<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Insurance language<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Ideally, you can work with the same attorney who was involved in negotiating the original lease, who can compare the documents and redline any changes or additions. At the very least, a new attorney can review the lease to make sure your interests are protected and there are no red flags.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Mistakes_to_Avoid_During_Commercial_Lease_Negotiations\"><\/span>Mistakes to Avoid During Commercial Lease Negotiations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400\">Negotiating a commercial lease is a complex process, and small oversights can lead to long-term financial consequences. Being aware of common mistakes can help businesses avoid costly mistakes and secure better lease terms:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Overlooking_Hidden_Fees\"><\/span><b>Overlooking Hidden Fees<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Commercial leases often include fees that are not immediately apparent, such as Common Area Maintenance (CAM) charges, property taxes, or utility costs. Failing to thoroughly review these details can lead to unexpected expenses that inflate the total cost of the lease. Businesses should always request a breakdown of these fees and ensure they align with the rest of the market.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Ignoring_Renewal_Terms\"><\/span><b>Ignoring Renewal Terms<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Renewal terms are often taken for granted during initial commercial lease negotiations, but they can have a significant impact on your long-term costs. If renewal terms are not explicitly stated, landlords may impose unfavorable conditions later. Negotiate favorable renewal terms upfront to avoid surprises and secure predictable costs for the future.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Failing_to_Negotiate_Tenant_Improvement_Allowances\"><\/span><b>Failing to Negotiate Tenant Improvement Allowances<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Landlords often provide Tenant Improvement Allowances to help businesses customize the leased space to their needs. Not addressing this during negotiations can mean missing out on financial support for necessary upgrades. Ensure that the allowance is sufficient to cover anticipated improvements and clarify how unused funds can be applied.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tips_for_Negotiating_Favorable_Commercial_Lease_Terms\"><\/span>Tips for Negotiating Favorable Commercial Lease Terms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400\">A well-prepared negotiation strategy can significantly improve lease terms and provide financial benefits. Implementing these strategies can help businesses achieve the best possible outcomes during commercial lease discussions:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Leverage_Multiple_Offers\"><\/span><b>Leverage Multiple Offers:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">\u00a0When possible, consider multiple properties or landlords simultaneously. Having alternative options provides leverage in negotiations, as landlords are often more willing to make concessions to secure your business. Use competing offers to request reduced rent, more favorable clauses, or additional perks.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Request_Rent-Free_Periods\"><\/span><b>Request Rent-Free Periods:\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Rent-free periods can offer financial relief, especially during the initial months of occupancy when businesses often face upfront expenses like renovations and moving costs. Try to negotiate for a rent-free period as part of the lease agreement, especially if the property requires substantial improvements or has been vacant for a while.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Emphasize_Long-Term_Value\"><\/span><b>Emphasize Long-Term Value:\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Highlight the value your business brings to the landlord. For instance, if your company plans to occupy a high-profile location or lease multiple properties, use this to negotiate better terms. Landlords value stable, long-term tenants and may offer incentives such as lower rent or reduced fees to secure your business.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Negotiating_a_Commercial_Lease_and_Accounting_Software\"><\/span>Negotiating a Commercial Lease and Accounting Software<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400\">When u<\/span><span style=\"font-weight: 400\">tilizing lease accounting and management technology you can more clearly identify crucial lease language, lease obligations, and <\/span><a href=\"https:\/\/visuallease.com\/compliance\/\"><span style=\"font-weight: 400\">ensure compliance<\/span><\/a><span style=\"font-weight: 400\">,\u00a0 which enables you to keep track of current financial obligations and critical dates, plus important details to help with future lease negotiations.<\/span><\/p>\n<p><span style=\"font-weight: 400\">For example, <\/span><a href=\"https:\/\/visuallease.com\/solutions\/lease-management-software\/\"><span style=\"font-weight: 400\">lease management software<\/span><\/a><span style=\"font-weight: 400\"> can help you identify if you paid for space you did not use, or overpaid for services such as cleaning or utilities. Armed with that information, you can look out for those issues in new leases or address them in current leases prior to renewal.<\/span><\/p>\n<p><span style=\"font-weight: 400\">With all your leases entered into a centralized system of record, you can easily group information, generate reports and view a complete picture of your lease portfolio. You can also view individual lease details and cut data by region, landlord\/lessor, expiration dates and other criteria.<\/span><\/p>\n<p><span style=\"font-weight: 400\">A robust <\/span><a href=\"https:\/\/visuallease.com\/solutions\/lease-accounting-software\/\"><span style=\"font-weight: 400\">lease accounting system<\/span><\/a><span style=\"font-weight: 400\"> such as Visual Lease enables you to search for and identify automatic renewals on leases that you negotiated long ago, which gives you the opportunity to easily determine whether the terms are still favorable or if they need to be renegotiated.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Which_alerts_help_prevent_costly_auto%E2%80%91renewals_or_missed_termination_windows\"><\/span>Which alerts help prevent costly auto\u2011renewals or missed termination windows?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400\">Lease management software can generate proactive alerts for upcoming critical dates to help ensure you never miss an important deadline. These alerts allow you to review lease terms, renegotiate if necessary, or plan for an exit. For example, a comprehensive system like Visual Lease can flag leases approaching critical dates such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Automatic renewals<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Lease expirations<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Termination windows<\/span><span style=\"font-weight: 400\"><br \/>\n<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Key obligations tied to payments or lease clause<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Using these alerts strategically allows businesses to maintain control over their lease portfolio, avoid unexpected costs, and take advantage of negotiation opportunities before deadlines pass.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Get a head start on your negotiation power with a <\/span><a href=\"https:\/\/visuallease.com\/by-function\/real-estate-fleet-and-equipment-operations\/\"><span style=\"font-weight: 400\">real estate lease accounting software<\/span><\/a><span style=\"font-weight: 400\">. More than 1500 companies have used Visual Lease as their system of record for all leased real estate and equipment assets. Through proper lease management within one easy-to-use tool, you can simplify and automate lease information that you can leverage for more successful commercial lease negotiations.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]\n","protected":false},"excerpt":{"rendered":"<p>[vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; overlay_strength=&#8221;0.3&#8243; shape_divider_position=&#8221;bottom&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_position=&#8221;all&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; width=&#8221;1\/1&#8243; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]We\u2019re diving into the intricacies of GASB 96, a significant standard that&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[170],"tags":[284,185,210,215],"company_size":[],"company_portfolio_size":[],"company_industry":[],"case_study_topic":[],"class_list":["post-9083","post","type-post","status-publish","format-standard","hentry","category-lease-accounting","tag-asc-840","tag-asc-842","tag-fasb","tag-lease-accounting"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/posts\/9083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/comments?post=9083"}],"version-history":[{"count":0,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/posts\/9083\/revisions"}],"wp:attachment":[{"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/media?parent=9083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/categories?post=9083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/tags?post=9083"},{"taxonomy":"company_size","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/company_size?post=9083"},{"taxonomy":"company_portfolio_size","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/company_portfolio_size?post=9083"},{"taxonomy":"company_industry","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/company_industry?post=9083"},{"taxonomy":"case_study_topic","embeddable":true,"href":"https:\/\/visuallease.com\/wp-json\/wp\/v2\/case_study_topic?post=9083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}