Companies need space in which to operate, but they do not necessarily need to purchase that property. Businesses may rent facilities instead. Strip malls, large office buildings and even stand-alone facilities can provide lease opportunities for new and growing businesses.
Business leaders can find suitable facilities in high-demand locations that fit their operational needs. Commercial leases often lock companies into years of lease payments, but they allow for greater flexibility than a purchase. In some cases, business leaders may cover more than just base rent. They may have to cover maintenance and repair expenses as well.
Every commercial lease is different
In the residential real estate world, landlords almost universally retain maintenance and repair responsibilities. The situation is not nearly so clear-cut in a commercial lease scenario.
There are multiple types of leases that may pass various expenses on to the tenant. In a triple net lease, for example, the tenant assumes responsibility for taxes and maintenance costs, as well as property insurance.
Those renting one unit in a larger shared space may be subject to common area maintenance (CAM) fees. Their landlord may maintain the parking lot and the majority of the major systems for the rental unit, but they pass those costs on to the tenants. Both the allocation of maintenance responsibility and the costs imposed can determine whether a particular rental unit is appropriate for a specific company.
Maintenance obligations and expenses can create a major burden for a new or growing business with minimal revenue. Reviewing the terms of a commercial lease and a business plan with a skilled legal team can help those looking at rented spaces avoid overextending themselves.
