Business owners know very well that their choice of location can be a significant factor in their success.
The average commercial lease lasts three to five years. And if business owners find they are in a prime location, one their customers recognize, they might wish to consider renewing their lease. However, renewing a commercial lease can come with some challenges for which business owners must plan strategically.
First, review the terms of the original lease
Of course, there are steps that business owners must take before signing a lease in the first place. For example, they should ensure they negotiate and address specific details in the lease, such as:
- Renewal terms and negotiations
- Rent specifications
This is essential because, under New York law, landlords do not have to renew the commercial lease or negotiate rent in the renewal offer unless it is explicitly noted in the original lease. Therefore, business owners must take time to reevaluate the terms of their lease carefully as they approach a negotiation to renew it.
Tips to consider when renewing a commercial lease
In the business world, it is critical to plan ahead. Business owners must make sure they give themselves plenty of time to work with if they wish to negotiate a renewal of their lease.
Then, once business owners review the details of their original lease, they should:
- Analyze the market carefully: Research new listings and property values, as well as the average rent payments for commercial properties similar to yours. Economic conditions are always subject to change, and it is critical to analyze the market regularly. Having this analysis on hand can be crucial during negotiations.
- Consider the competition: Even if you do not want to move the location of your business, it can help to research competitive locations. If landlords face competition, they might be more willing to negotiate a fair lease.
- Understand the landlord’s perspective: Like most cases, taking time to understand the different perspectives – and rules landlords must adhere to – can inform the negotiation tactics and help determine the best option moving forward.
Whenever business owners negotiate a commercial lease or renewal, it is also critical for them to consult an experienced attorney so they can ensure they understand all of the details in the lease and protect their best interests.