Key Lease Terms to Consider in a Commercial Office Lease

by CoyDavidson on May 2, 2011

Office Leases are Complex Legal Documents

Commercial lease agreements are one of the more complex legal documents an office tenant will have to negotiate. Beyond the basic business terms such as rental rate, build-out allowance, operating expenses and term of the lease, a commercial lease includes many separate agreements which, taken alone, are complex in and of themselves.

In spite of the complexity of commercial leases, some tenants tend to think of a lease as a rather simple, “standard” document.  Tenants who do not utilize the services of a qualified tenant representative and legal counsel before signing a landlord’s lease form are taking a huge risk. It is only later, when a problem arises, that an attorney is consulted.

Below is a list of some of the top issues that typically have to be considered when negotiating a commercial office lease.

Leases are Getting More Complex

Leasing office space is continually evolving and new issues are rapidly becoming a part of many lease negotiations including green lease issues and dealing with special communication issues.

These communications issues involve the “Three R’s”: risers, rooftops and redundancy.  Many larger tenants or tenants with special communications needs are particularly concerned with these issues.  “Risers” refers to the tenant’s access to riser space in a building to bring in fiber optic cables and other cable lines.  “Rooftops” refers to the tenant’s access to space on the roof of a building for satellite and microwave communications antennae and related facilities.  “Redundancy” refers to the tenant’s access for space for back-up generators and to power computer systems and perhaps back-up HVAC systems.  Landlords may want to charge additional rent for such access, while tenants will seek to have such access included in the base rent.  Other issues concern the Landlord’s approval rights regarding the installation, repair and maintenance of such facilities, as well as conflicts among various tenants with similar facilities.

The issues mentioned above are not “all inclusive”. There are number of other issues that will arise in a lease negotiation and it only underscores the need to utilize professionals who specialize in particular segments of commercial real estate services. The idea that property data is more readily accessible and you can “google” your way through the mechanics of a lease transaction is a highly risky endeavor.

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  • good job Coy

  • Jay McConnell

    I like the points about communications: rooftops, risers, and redundancy. We are working through those issues right now.

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