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Updated over 6 years ago,
Looking for tips / pitfalls to avoid on commercial leasing
Hello fellow BPers,
I wanted to get some advice from the trusted BPers on commercial leasing.
I found a commercial property to start a business in the Glendale / Glassell Park area (Los Angeles, CA). I am currently negotiating with the landlord's agent and asking her questions.
Here are a few things I wanted to know -
1) I wanted to know if I need a real estate agent to negotiate on my behalf.
2) I also learnt that the if I get a real estate agent to negotiate my lease, they get paid by the landlord. Is that the case in CA?
3) For the building to be approved for licensing, we need to split the bathroom in the front office into 2 and add a door in the first office into the new bathroom. Since this is a value add to the property and it is a fairly short lease (3yr lease + 3 yr renewal option), we would like the owner to make these improvements before the start of the lease. Is this a normal ask as a potential tenant?
4) It's NNN lease. Does that mean if the roof falls apart, is the tenant liable to fix it or is it usual to have caps on capital expenditure and can I ask the landlord's agent to have a cap? If so what's a typical cap amount if there is one?
5) What are the sublet terms generally in commercial leasing?
6) What is an exit strategy? i.e if we close the business say in 2 years or the business doesn't get licensed in the first 3 months? Do we need a clause? Is that the norm?
7) Is it reasonable to ask the landlord to fix the damaged floor in the back room?
8) Is it the norm for the landlord to put a fresh coat of paint inside?
I have read online that each commercial lease is different and I totally understand. I am trying to figure out what's the norm in the commercial lease world and also pitfalls I should look out for.
Any help would be greatly appreciated.
Cheers
Vinay