Signing a Commercial Lease: The Preparation Checklist

When starting a brick-and-mortar business, signing a lease agreement is one of the most critical decisions and determinants of success. Before diving head-first into a significant financial and time commitment. As a tenant, you’ll have to consider how to plan and prepare for a smooth execution of what you’re promising to perform in the lease. By reviewing timelines and contract terms and collaborating with a trusted real estate professional, architect, and design team, you can set yourself up for success before signing, laying the foundation for a thriving, sustainable business. 

Aligning Project and Lease Timelines

Before signing a lease, work with a licensed professional who understands the process and program to ensure lease deliverables align with the project timeline and opening date.

Avoid delays in opening and paying rent without generating revenue by having a permit, preparing submittals to the city and landlord, and considering possible unknown delays, like electrical upgrades, before the lease commencement. Review lease terms to determine if it is “use by right” (permitted within the zoning district) or will require additional review and preparation.

Developing a Relationship With Your Real Estate Professional 

Building a solid relationship with a real estate professional will help you navigate the commercial real estate market and ensure your lease aligns with your brand positioning, budget, and goals. Throughout the search, your agent or broker should seek to understand your goals and needs, advocating for your best interest. With industry experience and thorough knowledge of your brand and goals, they can provide their insight and approval so you can feel confident signing your commercial lease. 

Understanding Landlord Work and Tenant Allowance

Before signing, you’ll want to grasp the landlord work and tenant allowance outlined in the contract. Defining what work must be performed by the landlord, including renovations and other improvements, the landlord work clause helps you understand the scope of the landlord’s duties and the work you must complete. Review with your architect and engineer for additional clarity before signing. 

The tenant allowance is an incentive from the landlord, reimbursing you for specific improvements once the total build-out amount is paid. You’ll need to comply with a list of requirements to receive these funds, so understanding and preparing to meet these is key. 

Receiving Approval from Architecture and Design Teams

As key players in bringing your brick-and-mortar vision to life, architecture and design teams must also buy into the timelines outlined in the lease, confirming that deadlines are feasible. In addition to buying in before officially signing the lease, your architects and design team may need to kick off their services in advance to meet fast-approaching deadlines. 

By this time, your architect and engineer have visited the site to help evaluate the program and budgets and identify any potentially costly red flags. Once the lease is signed, all internal and external team members should move forward at full speed. 

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Preparing to sign a commercial lease involves an intensive review of terms, drawing up timelines and documents, and collaborating with experts to ensure alignment among all parties. 

Through this careful process, leveraging partner expertise, you can successfully launch your brick-and-mortar business, securing the ideal canvas to develop into your dream space. 

Contact us at Erin Morris to discover our innovative, full-service design and architecture.