.. Overview

... COMMERCIAL LEASING IS THE MOST COMPLICATED REAL ESTATE TRANSACTION - Leasing commercial space is the most complicated of all real estate transactions - be prepared for the unexpected. Also -- it can take many months to identify, negotiate, construct and move into your new space - plan for this.

... KNOW WHAT YOU WANT; ACT QUICKLY - Always act QUICKLY, no matter if space is tight or if it is widely available. Know what you want, be prepared to be flexible, BUT -- When You Find Space Which Meets Your Criteria, Act Like Lightning! Leasing space is like buying antiques ... every space is unique; when you find what you want, grab it!

... HAVE SPACE BACKUPS - Anything and everything can and does happen before a lease is executed (believe me). I strongly recommend that more than one suitable space be identified, and more than one offer be submitted. This approach also enhances your negotiating strength.

... LANDLORD/OWNER, aka HENRY VIII - Successful Owners are extremely disciplined in running their buildings, and are understandably risk adverse. They carefully control the types of businesses they lease to, and the creditworthiness of the businesses they accept as tenants. Every Owner has different requirements; every Owner has different lease terms. They set all the terms and conditions; they can change their minds for any reason or no reason (until the lease is executed); they are the ultimate BOSS.

... RENT-TO-GROSS-BUSINESS-RECEIPTS COVERAGE - Owners want to verify that the total rent for their space is approximately 15% of the gross receipts/gross revenues of the business which will be leasing the space. If the rent is more than 15% of the gross receipts, they begin to worry about the tenant's ability to carry the rent. They may decide to proceed and lease the space, or they may require more money as a security deposit, or they may simply decline to lease the space. If your business is a startup, and if the owner is still willing to lease their space (many owners do not lease space to startups), be prepared to make a substantial security deposit -- see the 'Startup' section.

... EVERYTHING IS NEGOTIABLE - 'Everything is negotiable' is not a bad way to look at a lease; terms depend strongly on market conditions and tenant creditworthiness. When space is tight, owners dictate terms and conditions with very little flexibility; when there is a lot of space on the market, the tenant has more negotiating ability. Understandably, tenants with stronger credit have more bargaining ability than those with weaker credit.

... BUDGET - Make a detailed budget -- include items such as the lease security deposit (this can range from 2 to 6 months, or more, depending on the use & the tenant), buildout/construction costs (Owners MAY or MAY NOT offset these expenses), telecom costs, liability insurance, moving expenses, the time it takes to effect your move (e.g. it may take 1 to 6 or more months after signing the lease before you can take possession of the space, depending on the complexity of the construction/buildout), etc.

... ZONING, CERTIFICATE-OF-OCCUPANCY - Determine your use, the required zoning, and Certificate-of-Occupancy. Double check the spaces you consider for appropriate zoning -- you do NOT want any surprises after the fact.