Renting Commercial Real Estate

Renting Commercial Real Estate: Step-by-step Guide

If you are starting a new business or expanding an existing one, you might be looking for an office, warehouse, or another commercial space for you and your colleagues. While the process might seem simple, there are lots of nuances to consider: different commercial lease types, letters of intent, proper budgeting, and more.

In this article, we want to guide you through the process of commercial leasing and discuss the main issues you might face along the way.

Process of commercial leasing

Understand your business goals

To begin with, you need to know exactly what commercial space you are looking for. You should understand what your company needs at this very moment: an office, industrial building, land, and so on. You should also ask yourself how much space is needed and where it must be located.

Answers may depend on a variety of factors, so take your time and ponder these questions. While some need a warehouse in a calm area with good transportation, others require an office in the business centre such as Bishop Ranch (which is located in San Ramon, California) and these two are completely different scenarios of the same commercial lease. If you find this stage challenging, consult with your partners and colleagues.

Find commercial real estate that meets your needs

Once you have a clear picture of your preferred commercial lease type and the amount of money you are ready to spend on it, it’s the right time to research your options. The modern market is extremely active and competitive, so it may be difficult to find the right real estate quickly.

The simplest way to start is to surf various websites which list commercial properties. You can filter results by location, size, price, amenities, availability dates, and more. But keep in mind that the best options are quickly leased, so don’t waste precious time when an attractive offer comes by. You can also turn to real estate agencies that will do the search process instead of you for a certain fee.

After you get a list of potential properties for rent, it is time to make appointments. Meet landlords and ask them to show the estate. Don’t hesitate to ask any arising questions. You pay money and need to know everything to the slightest detail.

Complete the letter of intent (LOI)

When you find a property that suits your needs and budget, the negotiation stage begins. Before completing the official contract, you and the landlord need to discuss the main points in a lease proposal or letter of intent as it is often called.

It is an informal document where you discuss the rental period, lease type, price, included services and amenities, improvement allowance, and other important details. Being honest and transparent during this stage is crucial because it eventually saves you lots of time, money, and nerves. If you get the help of a real estate agent, they might even negotiate the price through the LOI or at least include extra services to the lease. For example, the Internet, mail delivery, or an endless supply of coffee and tea.

Finalize the lease

Once the lease proposal is ready, you meet the landlord or their representatives and sign up a lease agreement previously prepared by your company or professional agents. Asking reputable commercial lease solicitors to read the contract is a brilliant idea because they will notice all pitfalls and inconsistencies, if there are any.

Main disagreements

Not always everything goes as planned and certain problems and misunderstandings might come up in the process of renting a commercial property. When you know them in advance, you can react quickly and calmly:

  • Contract duration. Landlords prefer clear end dates, while tenants worry that the business fails and they will still need to pay by the end of the term;
  • Repairs. If something gets broken, you might have to pay from your own pocket;
  • Period of time when you need to pay the rent. For example, the first 5 days of the month;
  • Real estate reviews. It means that the landlord may appear from nowhere to check that the property is in good condition.

We recommend clarifying all these issues not only in an oral but in a written form as well. Thus, you will have fewer worries and stress.

General catches

While most landlords are understanding and genuine, there are enough people who don’t mind tricking you at any point in the lease agreement. Luckily, most such catches are known and you can protect yourself before the contract is signed. They are:

  • Even if your business is not VAT registered, it may still be charged VAT costs;
  • The availability of car parking doesn’t automatically mean that you and your workers can use it. This might be a separate cost item;
  • Raising the price of rent. Make sure that the price is fixed in the contract and won’t be changed;
  • The list of amenities and properties you can use. For example, conference rooms, security, reception desk, and so on.

If you want to avoid these problems, hiring a commercial property agent is the right way to go. They will help you find the necessary real estate and ensure that the contract doesn’t contain any traps.


To launch a successful company, you need to take care of various things including a convenient, spacious, and pleasant place for your employees. The process of leasing commercial property includes evaluating your business and coming up with a clear budget, considering appropriate options, and of course, understanding what lease type you need. With this information, you will surely be well-armed and make the right decision.