Addressing Significant Issues in a Lease-Clause Analysis

It is a basic fact today that almost every business enterprise will enter into s
ome form of commercial real estate leasing agreement every couple of years. At f
irst blush, it may seem as if leasing commercial real estate is fairly straight
forward with no complicated transactions. However, since commercial real estate
leasing is a process, it is important that all parties involved have real estate
knowledge if the lease agreement is to be successful. Due to the complications
in our society today and the many situations that can arise, a lease agreement s
hould satisfactorily protect the interests of all parties involved, both the lan
dlord and the tenant.
In order to provide superior tenant services, many landlords have seen the importa
nce of understanding and negotiating for a simple commercial real estate lease.
As a result, insisting on the fact that tenants sign the Standard lease does littl
e to protect the interests of both parties. On the other hand, signing a poorly
understood or constructed lease agreement for the tenant can result in unpleasan
t surprises should such a situation arise. By the same token, even inexperienced
landlords will often embrace a lease agreement that they do not fully understan
d and thus impose upon themselves terms and conditions they may not fully have u
nderstood.
A lease is much like a partnership and hence commercial real estate leasing sets
out parameters of a business relationship. A carefully drafted lease will thus
offer both parties benefits and protection should unforeseen difficulties arise.
While the potential for adversity is diverse, commercial real estate leasing ag
reements are generally and primarily focused on issues of base rent and concessi
ons. This however should not be the case. There are a host of other important co
ncerns that are often overlooked and under-negotiated in a lease agreement that
can cause serious problems in the unforeseen future.
The core concepts of a successful negotiation require that both parties have kno
wledge with regard to the significant issues involved. The process of the lease
evaluation often starts with a tenants own needs. When landlords are more involve
d with understanding the process from the tenants perspective, they in fact ultim
ately end up saving money, time and effort. Over the years, landlords and tenant
s have become knowledgeable over commercial real estate leasing, but often at a
cost of a bad experience. However, when both parties are aware of how to evaluat
e the issues involved, even on a cursory level, lease negotiations can be a plea
sant and a successful experience and can help avoid a future bruising.