No commercial property owner wants any of their spaces to remain vacant for long. Empty spaces mean lost rent. If you have a commercial property that’s largely retail space or a mixed-use property with office and retail spaces, your tenants often depend upon each other to attract customers. That makes a vacant property costly for everyone.
Further, when you have multiple spaces that people can see are empty, you risk your property being perceived as a dying spot that no one’s interested in as a tenant or customer. Finally, these vacant spaces often attract vandals, thieves and other unsavory characters who can bring down the property value (and the amount of rent you can seek).
If you’re having difficulty attracting a long-term tenant for a space, why not consider offering it for short-term use? You can offer a monthly lease with an option to renew if you don’t have a long-term tenant lined up with the monthly lease expires.
Who can benefit from a short-term lease?
There are a number of types of enterprises for which a short-term lease can be a perfect fit. These include:
- Pop-up retail stores – This can include seasonal stores or retailers dedicated to sports team paraphernalia for a local team that’s in the playoffs or championships.
- Experiential spaces – One common example is an art exhibition space where local artists display and sell their work.
- Charitable work – Some groups rent a space when they need room for a big fundraising campaign to prepare mailers, make phone calls to solicit donations or prepare for an event. If you donate space to an eligible non-profit, you may even be able to get a tax write-off for it.
Many budding entrepreneurs just need an affordable space they can rent without being tied into a long lease to determine if their idea is a viable one.
Of course, any short-term tenants would need to abide by the same zoning ordinances and other rules as long-term tenants. You need to decide to what extent. if any, short-term tenants can modify a space. You also need to be cognizant of your long-term tenants when selecting short-term ones.
A month-to-month or other type of short-term lease agreement requires careful crafting. You can’t just make a few modifications to your regular lease agreement and expect that to work for you. Having legal guidance as you draw up and negotiate these leases is crucial.