Commercial Lease Hacks

"Most people will not put in the time to get a knowledge advantage." -Mark Cuban

10 years ago I was new to the commercial real estate business. After grabbing my college diploma, getting licensed, leasing a new car, and spending precious money on a new wardrobe to look halfway presentable I hit the streets looking for commercial real estate deals. While I pounded pavement, during off hours I would pour over commercial real estate books. It seemed as if every book I could get my hands on was written for a first time investor, property manager, or someone other than a green commercial real estate broker.

Then I stumbled across Negotiating Commercial Real Estate Leases by Martin I. Zankel. Check it out on Amazon here: http://amzn.to/1FmEWs6. This was a nugget of gold in a sea of dross. It was about 250 pages of commercial lease advice written by a broker turned lawyer. I stumbled across my copy today and it's well worn and beat up from rereads and reference. Lots of the material went over my head in those early years but I would repeat its wisdom in client meetings and conference calls with conviction. Enough people believed me as I started to broker increasing numbers of office leases.

Here are three takeaways that have helped my clients and might help you too:

1) Controlling the lease document.
Zankel's first gem of advice is to "GET CONTROL OF THE LEASE DOCUMENT. The party who controls the drafting of the lease document will win all the small battles."

Great piece of advice, especially in dealing with smaller landlords or business owners that begrudge every dime spent on attorney lease review. Simply offering to draft the lease or submit a copy during the initial offer gives a tenant or landlord tremendous advantages during lease negotiation and review.

2)  Including caps on expenses.
The idea of limiting expenses on tenant or landlord responsibilities was a new concept to me years back and occasionally I will introduce caps during certain situations depending on the situation.

3) Landlord Clauses
Appendix II contains an impressive list of landlord clauses to review and potentially draw from. A simple read is a must, a through understanding makes you sound like you know what you are talking about.

This was and is a great book for tenants, landlords and broker's to read and absorb valuable takeaways from.

If you need help negotiating your next lease, you can reach me at:

Nick Gustafson
605-201-2809
nick@benderco.com