Commercial Leasing Tips How to... 1. Determine the fair market price of a space for lease 2. Evaluate whether a space is right for a tenant 3. Decide what length of time the term a lease should be 4. Evaluate whether exclusivity benefits or harms tenancy 5. Negotiate the best price and terms of a lease 6. Ensure that the terms of the lease fit your best interests 7. Build a team of experts to help you make sound decisions 8. Confirm that proper insurance is in place to protect both parties 9. Evaluate NNN (Triple Net), Gross Lease, CAM charges, etc 10.Locate the best tenant or available space for lease (answers below...) 1. Determine the fair market price of a space for lease:     With an ever-changing marketplace, it can be challenging to figure     out what the current trends and market rents are in a specific area.      The true market value of market rent is the price a tenant would      pay for a space that is available in the open market. Since every     property is inherently unique, it is wise to be educated on the     terms offered at similar competitive properties as well as what new      tenants have recently paid for comparable space. Search the     local classified ads, websites like LoopNet & CoStar, or contact a      commercial real estate broker for an up-to-date list of properties. 2. Evaluate whether a space is right for a tenant:     Besides "location, location, location", there are several factors to     consider when evaluating whether a space fits a tenant. Access     and exposure to the tenant's target market, proper parking, zoning,     ADA requirements, electrical and plumbing supply, restrooms, fire      prevention equipment, existing tenant mix and facilities on the     premises and in the surrounding area, financial stability, credit, and     durability of both the tenant and the landlord, ability to negotiate a     lease on terms that are agreeable to both parties, proper business     plan, compliance with local agencies and regulations, etc.     3. Decide what length of time the term a lease should be:     Since a lease is a legally binding agreement, the length of the term     is very significant. Short-term leases with options afford both     parties the flexibility of terminating or renegotiating upon expiration     of the term, but offer less security regarding the length of tenancy,     price, and other terms. Long-term leases provide some sense of     assurance that the space will be filled for the landlord and that the     tenant has a stable location to operate their business from. Always     remember that lease agreements are legally enforceable and can be     enforced through arbitration or litigation, so pay attention to     whether the lease offers a mediation clause to handle disputes. 4. Evaluate whether exclusivity benefits or harms tenancy:     Competition can sometimes be the deciding factor as to the     success or failure of a business. Synergistic businesses that attract     like-kind customers and clients can provide very positive effects for     individual businesses and the overall success of a building, while     direct competitors with superior pricing, products, or services, can     be the bane of existence for a tenant or landlord. Tenants who can     find locations where they either monopolize a market or exist among     constructive competition should thrive, and landlords that place the      right tenants in their spaces have a higher chance of success. 5. Negotiate the best price and terms of a lease:     There are many ways of entering a lease agreement, from standard     to elaborate documents to verbal or "handshake" agreements. While     verbal agreements can be legally enforceable, it is always     recommended to agree to the terms in writing. There are free     leasing forms available online, they can be drafted by an attorney,     and real estate brokers have access to leases that have been     approved by the California Assocation of Realtors. The number of     pages or time it takes to secure proper lease terms should not     determine the sufficiency of a lease, but proper terms describing the     length of the term, the price to be paid, maintenance and insurance     responsiblities, options, concessions, improvements, an exit and     remedy strategy, subletting, time of possession, security deposit,     late charges, parking, mediation/arbitration, escalation clauses, and     obligations upon exipration of the term of the lease. 6. Ensure that the terms of the lease fit your best interests:     With such a variety of terms and options available to incorporate     into a lease agreement, it is critical to make sure that the terms     are in your best interest. While it may be sufficient to agree to the     terms of a lease after careful review, it is always recommended to     have the document reviewed by a knowledgable real estate broker o     an attorney that has experience in real property transactions. 7. Build a team of experts to help you make sound decisions:     No matter your level of expertise, it is always a good idea to have a      team of experts to rely on when you need advice. By developing      relationships with tenants, property owners, real estate brokers and     lenders, attorneys, accountants, financial advisors, insurance     agents, contractors, planners, government agency employees, and      hiring experts to provide advice and services and referring business     to the people that you like to work with, you will surround yourself      with experts in the fields that will help you make sound decisions in     various situations. 8. Confirm that proper insurance is in place to protect both parties:     Typical leases require the landlord and tenant to carry insurance,     but it is very important to make sure that the right type of     insuranceis in place with the right amount of coverage. Landlords     should typically consider carrying liability insurance insuring     themselves, a property insurance policy in an amount     sufficient to cover the replacement cost of the property, and rental     loss insurance. Tenants should carry liability insurance naming the     landlord as an additionally insured and it is advisable to carry     business interruption insurance. It is typical for landlords and     tenants to exchange insurance policy informationb at the time that     the lease is executed, but may times that is the last time the     policies are verified. It is always a good idea to verify coverage at     lease once every year to ensure that each policy is still valid and     covers each party for the amount agreed upon in the lease. 9. Evaluate NNN (Triple Net), Gross Lease, & CAM Charges:     There are a wide variety of methods of handling the other expenses     associated with the property such as maintenance, insurance, and     taxes. NNN leases require the tenant to pay those costs, so it     should be clear how much the tenant will be expected to pay for     fixed costs like taxes and insurance. Gross leases feature a fixed      amount for the term of the lease (unless there is an escalation     clause in place) whereby the landlord pays the taxes, maintenance,     and insurance. CAM (Common Area Maintenance) charges are     typically applied on gross leases whereby the tenant pays the     landlord for maintenance items such as landscaping, snow removal,     general repairs and groundskeeping, etc and can vary in Lake Tahoe      due to fluctuations in snowfall over the winter. 10.Locate the best tenant or available space for lease:     Tenants and landlords have a variety of methods by which they can     search and compare options to find the right fit. Newspaper     classified ads, sites like LoopNet, CoStar, and TahoesChoice, and     local commercial brokers have access to lists of space available for     lease. Property owners can place signage on their properties, place     print or internet ads, alert their peers, or hire a broker to find them     a tenant. The advantages of using a broker is that there are no up-     front costs to market the property, and for a reasonable fee the      principal receives agenct representation from a licensed     professional with a legal fiduciary duty to represent your best     interest. Brokers often have access to systems like the MLS     (Multiple Listing Service) and websites that can give your property     national and international exposure, reaching a high number     potential tenants to maximize exposure and the likliehood of     placing a good tenant. Tahoe's Choice Real Estate has access to      proprietary information pinpointing businesses that are     growing in revenue and acquiring more space, which helps locate      the type of tenants that are looking for and have the means to     survive in new space. Feel free to contact us anytime for more     information on leasing commercial space in the Lake Tahoe area.  * The information above is deemed to be reliable, but not guaranteed or warrantied by     Broker. Always consult with your attorney and financial advisor prior to making a     decision about purchasing, selling, or leasing any property.