If you’ve got a commercial space that’s been vacant since your last tenant moved out, you’re losing money on it every month – and that lost rent is mounting. There are also security issues when a commercial space is empty.
Further, if there are multiple vacancies in a commercial building, it can start to look like businesses are starting to avoid it. That can become a self-fulfilling prophecy.
It may be time to get creative and consider offering a short-term lease. There are a variety of businesses that only have a need for a commercial space for a few months a year – or even less.
These have become increasingly popular in recent years. Small retailers choose pop-ups, or temporary stores, for a host of reasons. Sometimes, their merchandise is seasonal – for example, Halloween or Christmas items. Entrepreneurs may want to test out how their merchandise sells in a “brick-and-mortar” store as opposed to online.
Some types of businesses – like tax preparers – are seasonal. Smaller ones may only need space for a few months. An accountant who typically works at home may want a larger space to accommodate his clients and maybe some added temporary employees during tax season.
Other short-term tenants
Artists and designers will sometimes rent a space for a few weeks to have an exhibit. In some cases, non-profit organizations will need space for a limited time if they’re working on a project like preparing backpacks for kids in need ahead of the school year or sending care packages to servicemembers overseas.
Considerations for short-term leases
You’ll probably want to market to temporary renters who don’t need to make modifications to the space and can just pack up and leave everything the way they found it for the next occupant. You’ll probably want to include restrictions on renovations – unless they benefit the space.
Month-to-month leases are often the best for both the landlord and tenant. That way, there are no long-term commitments. As a landlord, this gives you the opportunity to rent to a long-term tenant without much delay if the opportunity presents itself.
Developing a short-term lease agreement for a pop-up store or another short-term tenant can be vastly different than the traditional lease agreement. It’s best to have experienced legal guidance to protect yourself and your interests.