Friday, April 24, 2015

Changing Times and Your Commercial Lease ...

IF there's ONE thing we know for sure, it's that things CHANGE! 

With that in mind, we know intuitively that we need to stay in touch with the needs of our customers. It’s likely that we’ll also keep our eyes and ears open to the things happening around us. But when it comes to the location that we operate from, how will the need for space to run the business continue to be met as things CHANGE around you? Planning for those needs is something that we need to carefully consider in advance. 

Dale Willerton and Jeff Grandfield
Because occupancy cost can be a significant item of expense, it warrants that some thought be given to how and when those needs will likely need to be addressed.

Here are some more great ideas related to this and other leasing considerations from our friends at The Lease Coach. 

Negotiating Commercial Leases & Renewals For Dummies
Commercial Leasing Tips for Commercial Tenants
By: Jeff Grandfield – The Lease Coach 
For many business-owners, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While an entrepreneur focuses on marketing and managing, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate. 

As explained in our new book, Negotiating Commercial Leases & Renewals For Dummies (co-written with my colleague, Dale Willerton), tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for an entrepreneur as the amount of rent he pays will directly affect the business’ financial bottom line.
Whether you are leasing a new location for the first time or negotiating a lease renewal for your business, these are some money-saving tips for tenants:

Select the Best Lease Length:  While a five-year lease term is still the most common, it is not necessarily the best term for your company. One year, three years, or even ten years may be a better fit for your business and a big factor will be the cost of leasehold improvements. If the cost of leasehold improvements is low enough, you may prefer a shorter term for flexibility. If this cost is substantial, you may require a longer lease term to amortize the costs. Agents, typically, receive a higher landlord-paid commission when you agree to a longer lease term so they will be motivated and push you to sign for a longer lease term. The landlord, however, may be flexible. Take the term that is best for your business.

Who Should Be The Tenant: Don`t enter into a lease agreement (or an Offer to Lease) under your personal name. This will make you personally liable for everything. Instead, form a corporation or holding company that will become the tenant. If you are negotiating on locations, but don`t intend to incorporate until a later date, then the Offer to Lease should state that the tenant is Your Name on behalf of a company to be incorporated (or Nominee). If you are opening multiple locations, it is often wise to form a new company for each lease agreement as further protection. Corporations also have tax benefits over sole proprietorships.

Operating Cost / CAM Queries: Operating Costs / Common Area Maintenance (CAM) often make up a large portion of the gross rent a tenant pays. Before you lease, ask the landlord and existing tenants if Operating Costs have increased much over the past year. While the Base/Minimum Rent is fixed, Operating Costs are adjusted yearly and tend to rise more often than fall. Landlords managing their own property may tend to over-spend to maintain or increase property value.

For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to

Jeff Grandfield and Dale Willerton - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail  or or visit

* Have you included your business location plans into your Business PLAN? 
NOTE: This is an area where Pro-Vision Solutions Inc. can assist ... for more details CLICK HERE

What are your comments or additional helpful suggestions for entrepreneurs? 

Let us know your thoughts and please share this with those in your circle of contacts!

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