Commercial Leasing in NYC and Abroad
When you are preparing to move or open your business, it is important to find a space that fits your needs. It is also important that your lease reflects your specific needs. Your real estate lawyer will be able to help you negotiate your new commercial lease. Office Leases, Shopping Center leases, outlets and store leases are all different formats and can be quite daunting to read and understand, riddled with acronyms and legal jargon throughout.
Leasing the right property for your business can be beneficial to your company, especially if you do not have a large sum of start-up cash to purchase a commercial property. Leasing allows you to avoid high mortgage costs, taxes, and building maintenance.
Searching for a Good Leasing Price
There are a few ways to determine what is the best bang for your buck on leasing a space. Your licensed real estate salesperson will be able to help you figure out your budget, and understand “rentable” square feet versus “usable” square feet. Looking at the value of buildings and other leased properties in the same neighborhood can help you and your real estate salesperson determine what properties fit your budget. When checking a property for leasing availability, it may be important to check what kind of business existed there before, how long it was there for, and how long ago it closed.
Term of the Lease
Leases come in a wide variety of lengths, usually from 6 months to any number of years. Shorter leases can be more beneficial to the business owners, while longer leases tend to favor the owner. Owners want longer leases, so that they can have a secure and consistent income. Business owners who lease tend to prefer a shorter lease, or a series of renewal options, so that they can move out if they feel like changing locations; or bowing out in the event that the business venture does not pan out. Having lease term “options” may often be the best compromise for both parties.
Important Items on a Lease
For business owners looking to lease a commercial property, there are a number of different points that you should look for. A preliminary Letter of Intent (“LOI”) or term sheet should precede the lease document and have all agreed upon points. General maintenance and repairs should be standard for most leases. Payment dates and usage agreements should also be noted on a standard lease. Look for a clear explanation of what is “rent,” “additional rent” and the rate of rent increases or escalations of other charges that may be passed to the tenant, like common area maintenance charges. Tenants may be responsible for the payment of real estate taxes and insurance (such as in a “triple net lease”) on a pro-rata basis calculated on your square footage. Security measures, utility uses, damages, and the like may not always be included, but are often negotiable. While a personal guaranty may be required, it can negotiated as a “limited guaranty” (sometimes called a “good guy clause” in New York). Having an experienced real estate lawyer in your corner is essential to address these crucial points and others.
If you have a specific type of business that is not typical retail or wholesale, you may have required items that are tailored to your industry, and may need to check zoning and certificate of occupancy requirements.
Leasing for a Restaurant
Restaurants have a larger checklist than most other types of business. Outside of Manhattan or other major city centers, you will require proper parking for customers. The leasing space should have ample bathrooms for ADA compliance, and a sprinkler system may be required. Garbage removal and proper ventilation is vital for any restaurant, which produces more waste than most other commercial spaces. There must also be proper gas or electrical hook ups for your kitchen appliances.
Gabor & Marotta, LLC has been assisting people and investors like you with their representation, transactional services and personal legal needs. We bring you the knowledge and resources to protect you, your business, your family, and your assets.
Gabor & Marotta, LLC does not provide tax, legal, property or accounting advice by publishing articles. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, property, or accounting advice.
Call 718-390-0555, 212-349-1200 or contact us online to schedule a consultation with a commercial real estate attorney at Gabor & Marotta, LLC. We proudly serve the Greater New York City metropolitan area, including Brooklyn, Manhattan and Staten Island, as well as Nassau and Suffolk counties.