Jeremy Piccini is a partner in the business and commercial real estate transactional groups at Bertone Piccini LLP. We asked Jeremy for some advice on how a commercial tenant (i.e. a business owner) should approach their office leasing needs and the process of leasing office space for their business including quick tips.
The right commercial real estate broker will guide the process of locating your ideal lease space and will help negotiate the lease terms with their industry insight as to what is standard.
Be sure to hire the right broker, not just any real estate salesperson, and one that focuses not just on the commercial (as opposed to residential) markets, but one that focuses in the region (i.e. county or cities) and asset class (i.e. industrial, retail, or office).
Quick tip: Tenant-side brokers are almost always paid their commissions by a landlord and listing agent, so this should be at no cost to tenants.
A term sheet, or letter of intent, is a non-binding document of business terms which a landlord and tenant should draft, negotiate and sign before attorneys get involved in the lease negotiation.
This document helps real estate lawyers, like us, to focus on “legal” issues in the document itself, and relieves either party from the risk of “re-negotiating” these set business terms later during negations.
After negotiating a term sheet, then the commercial real estate leasing lawyer comes into play to review and negotiate the lease document itself.
You should consider your lease, renewal or relocation options at least one year prior to renewal of your existing lease, as ‘shopping the market’ with a broker, considering relocation costs, and negating business and legal terms can be time consuming.
Also, the closer to current lease term expiration you get, the less likely your current landlord will be willing to offer you any deal in terms of discounted or free rent or free improvements.
So start early.