14 Things to Consider Before Signing a Commercial Lease

Start with a budget that includes rent, operating charges, utilities, insurance, parking, cleaning, maintenance, improvements, and eventual moving costs.

Ask how operating charges are calculated, which expenses may increase, and how those changes could affect your budget over the lease term.

Test the numbers against a delayed opening or lower-than-expected revenue. Would the business still have enough cash to cover its obligations?

The SBA similarly recommends combining initial and recurring expenses to evaluate how much capital a business needs and when it will need it. See the SBA’s business-planning guidance.

Picture the space with your equipment installed and a normal workday underway. Have an appropriate contractor or specialist evaluate electrical capacity, ventilation, plumbing, internet availability, floor loads, and equipment access.

For a contractor, that review might include whether vehicles and trailers can enter and maneuver, where materials will be stored, and whether machinery physically fits through the available entrances.

Identify necessary upgrades before committing. If the business depends on that work, negotiate who will pay for it and when it must be completed.

Visit during an ordinary workday and, if relevant, early mornings, evenings, or weekends. Check parking availability, traffic, noise, odors, lighting, security, and activity at neighboring businesses.

Walk through the property as an employee, a customer, and a delivery driver would. Consider where each person would park, which entrance they would use, and whether access would be available when needed.

If a particular access point, delivery schedule, or parking arrangement is essential, address it specifically in the lease.

An improvement allowance can help fund the space, but the timing of reimbursement matters as much as the amount.

Find out when payment would occur and what conditions must be satisfied first. Your business may need to pay for construction, equipment, deposits, and overlapping rent while waiting for reimbursement.

Consider whether that timing creates a funding gap. If it does, possible negotiation points include progress payments or reimbursement for completed portions of the work. Address those arrangements before relying on the allowance in your opening budget.

Compare the proposed lease term with the time you expect to need to recover your investment in the location. Then consider how the commitment would work if the business grows faster (or more slowly) than expected.

What happens if you need additional space after two years? What if demand falls and the location becomes difficult to sustain?

Those scenarios provide practical reasons to negotiate expansion rights, renewal options, or a defined exit arrangement. For a renewal option, review the notice deadline, any conditions on exercising it, and how rent for the additional term will be determined.

Create an agreed record of the property’s condition before taking responsibility for the space. Include photographs, equipment descriptions, existing damage, and any work that remains unfinished.

Ask for available maintenance records and identify equipment that may be approaching replacement. Clarify which outstanding items the landlord will address and which responsibilities you are being asked to assume.

Use the condition record when negotiating both delivery standards and move-out obligations. It gives the parties a concrete reference point for discussing how the property should be delivered and what condition will be expected when the lease ends.

Identify the signage your business needs, including its location, dimensions, lighting, installation costs, and approval process.

Consider every place customers might look for you: building directories, monument signs, storefront windows, and temporary opening signs. Evaluate visibility from the road, parking areas, and pedestrian approaches.

Also ask what happens if landscaping, construction, or another tenant’s sign obstructs your visibility. If visibility is a major reason for choosing the location, address those possibilities during negotiations.

Think about how neighboring uses could interact with your operations. Noise, odors, customer lines, delivery vehicles, and competing demands for parking or loading areas can all become points of conflict.

Where relevant, discuss restrictions on particularly disruptive uses or a narrowly defined exclusive-use provision. Be specific about the activity or business use you are trying to address.

Ask about vacant spaces and planned tenants as well. Future occupancy may remain uncertain, so consider how the lease would work if the tenant mix changes.

Speak with existing tenants about their experience with maintenance, billing, responsiveness, and construction coordination. Ask how problems are reported and whether they are resolved promptly.

Find out who makes decisions, who manages the property day to day, and who handles emergencies. A clear point of contact is especially useful when an issue affects access, utilities, or the ability to open for business.

Consider whether the management team appears to have the staff and procedures needed to provide the services promised in the lease.

Look for provisions allowing the landlord to relocate your business, change entrances or common areas, or terminate the lease for redevelopment.

Consider what exercising those rights would mean for your customers, employees, equipment, and investment in the space. If relocation is permitted, discuss what would make replacement space genuinely comparable in size, layout, access, and visibility.

Possible negotiation points include tenant consent, advance notice, comparable replacement space, moving expenses, signage replacement, and compensation for business interruption.

Identify who must approve plans, equipment, signage, contractors, and operational changes. Then examine how those approvals are supposed to happen.

Propose clear submission requirements, response periods, and an escalation contact. Address when the review period begins, how missing information will be identified, and how requested revisions affect the process.

These details matter when construction or opening depends on a decision. A workable procedure should give both parties a clear next step when an application is incomplete or a request remains unanswered.

Building rules can directly affect everyday operations. Review delivery hours, after-hours HVAC charges, access credentials, cleaning, waste disposal, outside storage, snow removal, and use of shared facilities.

Ask whether the landlord can change those rules during the lease term. Consider negotiating limits on changes that would materially increase your costs or interfere with the agreed business use.

If your business depends on a particular operating practice, such as early deliveries or outdoor storage, check that the lease and building rules address it consistently.

Compare the financial effect of free rent, a larger improvement allowance, reduced rent increases, parking concessions, and a lower deposit.

Look closely at the details. For free rent, clarify which charges are waived and which remain payable. For an improvement allowance, consider eligible expenses and reimbursement timing.

Then identify the problem you most need a concession to solve: opening cash, recurring expenses, operating flexibility, or exposure if the venture fails. Evaluate the offers against that need and compare their effect over the same period.

A contractor might prioritize secure outdoor storage and early delivery access. A retail tenant might place greater value on visibility and customer parking. Your priorities should reflect how your business will actually use the property.

Keep the list focused enough to guide decisions. It will help you evaluate proposals, make deliberate tradeoffs, and concentrate negotiations on provisions that materially affect the business.

Before signing, compare the final lease and its attachments against that priority list. Resolve outstanding questions about costs, property condition, approvals, and operating rights, and make sure the agreed changes appear in the documents you will sign.