10 Things to Negotiate Before Signing a Commercial Lease

Commercial leases are not like residential leases. They're longer (typically 3–10 years), the stakes are higher, and virtually every term is negotiable. Landlords present standard form leases as if they're fixed, but experienced commercial tenants know that most provisions can be modified — and the ones that can't often depend on market conditions and how much the landlord wants you as a tenant.

Here are the 10 provisions worth the most attention before you sign.

1. Personal Guarantee Scope

Most commercial leases require a personal guarantee, meaning if the business can't pay rent, the landlord can come after your personal assets. This is often non-negotiable for newer businesses, but the scope is negotiable. Push for a "good guy" guarantee: if you vacate and surrender the space in good condition with proper notice, your personal liability ends on the day you leave — rather than running through the end of the lease term. Also negotiate to limit the guarantee to a specific dollar amount or time period.

2. Common Area Maintenance (CAM) Caps

In NNN and gross leases, you'll often be required to pay a pro-rata share of building operating expenses — insurance, taxes, maintenance, management fees. These can vary wildly and are not predictable. Negotiate an annual cap on CAM increases (typically 3–5% per year, compounded) and a hard cap on what can be included. Management fees above 5–6% of base rent, capital improvements, and owner's equity costs should typically be excluded from CAM pass-throughs.

3. Tenant Improvement Allowance (TI)

The landlord's contribution to buildout costs is often the most significant financial negotiation in the deal. TI allowances are typically expressed as a dollar amount per rentable square foot. In a soft market, you can often negotiate substantial allowances — $50–$100/SF is common in office markets — to cover walls, flooring, electrical, and HVAC modifications. Get the TI in writing as part of the lease; don't rely on verbal assurances.

4. Rent Abatement

Free rent at the beginning of the lease is common, especially in markets with significant vacancy. Push for two to six months of free rent during your buildout period at minimum. From a landlord's perspective, abated rent is better than a lower base rent because their valuation is tied to the headline rent number.

5. Renewal Options and Rent Reset

A renewal option gives you the right to extend the lease at the end of the initial term. Negotiate for at least one option, with the renewal rent either fixed, capped at a percentage increase, or tied to CPI. Avoid "fair market rent" renewal provisions without a floor-and-ceiling mechanism — "fair market" is subjective and gives you no certainty.

6. Subletting and Assignment Rights

Life changes. You may need to sell the business, downsize, or bring in a partner. A lease that prohibits subletting or assignment without landlord consent (or with consent that the landlord can withhold arbitrarily) traps you. Negotiate for landlord consent not to be "unreasonably withheld, conditioned, or delayed" — a standard phrase in commercial real estate that gives you practical flexibility.

7. Co-Tenancy and Anchor Tenant Protection

If you're in a retail center and an anchor tenant (the big store that drives traffic) leaves, your business suffers. Co-tenancy clauses give you the right to reduce rent or terminate the lease if anchor occupancy falls below a threshold. These are common in retail leases and absolutely worth fighting for if you depend on foot traffic.

8. Exclusivity Clause

For retail and service businesses, an exclusivity provision prevents the landlord from leasing space in the same center or building to a direct competitor. Define "competitor" carefully — you want narrow enough language that it's enforceable, but broad enough to cover the competition you actually care about. Exclusivity is hard to get but sometimes available in markets where the landlord wants your brand.

9. Force Majeure and Termination Rights

Post-pandemic, tenants should insist on a meaningful force majeure clause that addresses government-ordered closures — not just natural disasters. Also negotiate for a termination right if the space becomes unusable for an extended period due to casualty, condemnation, or prolonged landlord-caused conditions.

10. HVAC and Systems Responsibility

The lease should clearly specify who maintains the HVAC system and who pays for replacement. Tenants often assume maintenance means small repairs, then discover they're responsible for a $15,000 compressor replacement. If you're responsible for HVAC, negotiate for the landlord to warrant the system is in good working order at lease commencement and cap your replacement obligation for equipment over a certain age.

Final Word

Get everything in writing and in the lease document itself — not in a side letter, not in an email, not in a verbal conversation. If it's not in the lease, it's not enforceable. Before signing any commercial lease, having a real estate attorney review it is worth every dollar — the protections you get (or miss) will affect your business for years.