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Leasing commercial property? Check your negotiation strategy.

Entrepreneurs that start up a new business or look to change locations will likely need to negotiate a commercial lease. These negotiations are often intimidating. An entrepreneur for a small business may go up against a landlord that has negotiated dozens of these contracts in the past.

Negotiating a commercial lease? These tips can help.

An aggressive landlord could push for an agreement that puts the tenant at a serious disadvantage. However, these tips can help to mitigate the risk of surprises after a leasing agreement is signed:

  • Complete due diligence. Complete due diligence before meeting with the property owner or agent. Consider zoning regulations and any potential future construction projects on or near the property under consideration.
  • Know your numbers. Have a bottom line and stick to it. Do not get caught up in the negotiating process and agree to an amount that is higher than intended. Do your research and know how much you are willing to invest in the property before beginning negotiations.
  • Prepare for some collaboration. A business leader specializing in commercial transactions points out that negotiations do not always result in a winner and a loser. Both parties generally make compromises to come up with an agreement that works for all involved. Be prepared to flex on some points, but know what issues are non-negotiable.

Although these tips can help level the playing field when negotiating a commercial lease, additional help is wise. An attorney experienced in negotiating these contracts can help to better ensure the agreement meets your needs. Legal counsel can review the proposed covenants and tailor them if needed.

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