Elliott Dolin is Managing Partner at Pacific Prime Properties, a commercial real estate investment firm based in Los Angeles. Responsible for property management and investments, Elliott Dolin deals primarily with industrial, medical office, and commercial retail spaces.
A potential tenant seeking to lease a commercial space for their business should posses a clear understanding of industry standards and market conditions such as market rental rates, lease duration, tenant improvements, rental increases and subletting rules. If the tenant has the benefit of this knowledge and a clear picture of its requirements, the negotiation process will be far more efficient and best suited to meet the tenant's needs. For example, a short-term lease offers flexibility for expansion or relocation, but a long-term lease may allow the tenant to lock in a more reasonable rental rate. Long-term arrangements may also invite favorable treatment from the landlord in terms of tenant improvement allowances. As an added measure of flexibility, many businesses opt for shorter term agreements with a renewal option.
Fixed rent increases in rent (often 3 percent / year) or periodic rent increases based on the Consumer Price Index may be spelled out in the lease. However, it may be possible for a tenant to negotiate one or more months of free rent, based on the the length of the lease term. Before signing a lease, the tenant should make sure that they understand the allocation of obligations between landlord and tenant for maintenance, improvements, taxes, insurance and utilities. The tenant should also determine whether subleasing is permitted. If so, the tenant may have the flexibility of sharing costs with another party should the leased space prove to be bigger than required.
A potential tenant seeking to lease a commercial space for their business should posses a clear understanding of industry standards and market conditions such as market rental rates, lease duration, tenant improvements, rental increases and subletting rules. If the tenant has the benefit of this knowledge and a clear picture of its requirements, the negotiation process will be far more efficient and best suited to meet the tenant's needs. For example, a short-term lease offers flexibility for expansion or relocation, but a long-term lease may allow the tenant to lock in a more reasonable rental rate. Long-term arrangements may also invite favorable treatment from the landlord in terms of tenant improvement allowances. As an added measure of flexibility, many businesses opt for shorter term agreements with a renewal option.
Fixed rent increases in rent (often 3 percent / year) or periodic rent increases based on the Consumer Price Index may be spelled out in the lease. However, it may be possible for a tenant to negotiate one or more months of free rent, based on the the length of the lease term. Before signing a lease, the tenant should make sure that they understand the allocation of obligations between landlord and tenant for maintenance, improvements, taxes, insurance and utilities. The tenant should also determine whether subleasing is permitted. If so, the tenant may have the flexibility of sharing costs with another party should the leased space prove to be bigger than required.
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