Over 5.5 million business applications were filed in 2023. This tops the previous year's applications by more than half a million.
Starting a business is one thing, but running it successfully is another. A significant portion of businesses fail in the first year, and many others fail within their first few years.
The truth is that a lot of work goes into running a business, and many people jump into it unprepared. Perhaps you have an excellent idea for a business, but you never thought about where to set it up. Looking into commercial lease agreements should be your next step. We'll discuss these agreements and how to navigate them here.
What is a Commercial Lease Agreement?
Before we look into commercial lease agreements, we should discuss some commercial leasing basics. What are commercial lease agreements?
A commercial lease agreement, as the name suggests, is a contract between two or more people stating one party has the right to use a certain property for business purposes. In exchange, the renting party agrees to pay a certain amount every few months or so.
If the business turns out to be successful, the tenant might choose to renew their lease.
Commercial Rental Terms
You should familiarize yourself with some common terms of property lease agreements before signing anything. Think about your business and the property you're leasing. This will help you predict what kind of lease terms you should expect.
Are you leasing a whole building or just a store within a mall? Within a shopping mall, certain terms like exclusive use and "going dark" rights might come up.
Exclusive use means your landlord can't lease nearby stores within the mall to similar businesses. Please note that these terms can be very specific. For instance, if you own a liquor store or a tobacco shop, the landlord can still rent the adjacent store to a dispensary, because it's not strictly the same product or audience.
Going dark refers to your right to terminate the lease if other businesses within the mall are failing. This stops you from having to stay open when it's becoming more cost-effective to close.
Read Carefully
Landlords want reliable, cooperative tenants, so it's in their best interest to work with you when drawing up a lease. It's also in your best interest to work with them and follow the standards of the lease. When landlords and tenants get along, things work much better.
A Guide to Commercial Lease Agreements
Commercial lease agreements are often central to the function of a business. We've talked about what these agreements entail here, but you can learn more by reading our blog.
Commercial leases can be made much easier with the help of a property management company. These companies will help you recruit and manage tenants. They'll also keep your property in clean working order for new tenants that come in.
We at Parker Property Management Inc. are one such company. We've been in this business for two decades and have offices all across the country. We invite you to look at what we can do for your commercial property.
