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What is a Real Estate Office Lease?
A real estate office lease, also known as a commercial lease agreement, is a legally binding agreement made between a landlord (lessor) and tenant (lessee) for the purpose of renting commercial space for business offices. The tenant, typically a business owner, will need to sign the office lease as a requirement for renting the commercial space.
Real estate office leases can have terms from five to ten years in length, so it is a big investment made by the tenant. Because of this, it is important that the tenant (lessee) fully understands the lease terms included in the agreement, and negotiates terms that may make the lease more favorable to the business.
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Examples of Commercial Real Estate Property
Commercial real estate property is property that is rented for commercial or business use, and it not just limited to office spaces. Businesses of all sizes may need to rent commercial space to store inventory, give their employees a place to work, have a retail space for customers, and more. Some examples of commercial property include:
- Office space
- Warehouses and industrial space
- Retail space (stores, shopping centers, etc.)
- Leisure space (hotels, restaurants, sports facilities, etc.)
- Healthcare space (medical, dental, nursing homes, etc.)
Common Terms in a Real Estate Office Lease
A real estate office lease will have varying terms, but below are some you will typically find which are important to understand:
Cost of Rent & Escalations
This clause will typically include the monthly fee paid by the tenant to lease the office space. Rental rates can vary, but is typically calculated off a price per-square foot ($/SF) basis. There may also be rent escalations over the lease term to keep an eye on, which are increases in rent based on certain timeframes.
Lease Term
This section of the lease will outline how long the length of the lease is. Office leases can typically see lease terms of five to ten years.
Modifications, Improvements, and Buildouts
For office spaces, it is common to renovate and modify the space to fit the office’s needs. There will be a provision in the lease agreement that outlines what the tenant is allowed and not allowed to do as it relates to renovations, modifications, and buildouts. Make sure the lease allows the modifications required for your business plans.
Maintenance and Repairs
There will be a section of the lease that outlines who is responsible for paying for maintenance and repairs of the property. Depending on the lease, this may be the landlord’s responsibility or the tenant’s responsibility. It is important to understand this so that you can budget accordingly.
Subletting
Subleasing space for offices can be common, and there is typically a section in the lease that addresses this. If you plan to sublease part of the office space, make sure the lease allows it and understand the obligations you will have if you do sublease part of the space.
Renewal & Termination
The lease will have language around the lease renewing (i.e., how the lease will renew) and how each party can get out of the lease. No one wants to think about worst case scenarios, but make sure this section is fully understood in case the lease needs to be terminated early.
Use Clause
Lastly, an office lease will typically have a clause that outlines what the property can be used for. If you’re planning to use it strictly for office space, make sure the language of the lease allows for this. If you plan to use any part of the space for other reasons (i.e., retail, entertainment, storage, etc.), make sure this is allowed under the current lease language.
Seeking Professional Advice
Whenever you are asked to sign a legal document, especially when it is a big investment, it is always recommended to seek professional legal advice. Commercial real estate lawyers can help guide you through the process of drafting or reviewing a real estate office lease. These professionals will understand the terms and what is fair within the market. They will also help protect your rights as a landlord or tenant to set the transaction up for success.
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Meet some of our Real Estate Office Lease Lawyers
Thomas G.
https://www.tgravelylaw.com/
Ryan W.
Ryan A. Webber focuses his practice primarily on Estate Planning, Elder Law, and Life Care Planning. His clients range from young families concerned about protecting their family as well as aging individuals. Ryan provides Estate Planning, Trust Planning, Special Needs Planning, Public Benefit Planning, and Estate Administration. Ryan focuses on the holistic approach to the practice of elder law which seeks to ensure clients are receiving good care when needed and that they preserve enough assets with which to pay for such care. Many families and individuals also come to Ryan for preparation of their wills, power of attorney, and healthcare guidance documents. Additionally, Ryan assists small and medium sized business owners with their organizational and planning needs. From starting or winding down a business, Ryan provides quality business advice.
Garrett M.
Attorney Garrett Mayleben's practice is focused on representing small businesses and the working people that make them profitable. He represents companies in structuring and negotiating merger, acquisition, and real estate transactions; guides emerging companies through the startup phase; and consults with business owners on corporate governance matters. Garrett also practices in employment law, copyright and trademark law, and civil litigation. Though industry agnostic, Garrett has particular experience representing medical, dental, veterinary, and chiropractic practices in various business transactions, transitions, and the structuring of related management service organizations (MSOs).
Elexius E.
My name is Elexius. I’ve been practicing since 2016. I began my career doing defense work for insurance companies. I handled worker’s compensation cases, insurance subrogation claims and a number of related employment issues including wage and hour disputes, resignation, termination and release of claims. I also handled employee contract matters and revised contracts as needed for my clients. In my current role I draft contracts and related agreements, including cease and desist, letters of understanding, and various notices. I also handle contractual interference issues.
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Jarrid C.
I’m the Managing Attorney at The Coaxum Firm LLC, a small firm located in Alabama that handles Family Law, Criminal Defense, and Personal Injury cases. My law partner is my older brother, Louis Coaxum, and we’ve been practicing together as a firm for over 8 years.
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Raquel G.
I have practiced law for 20+ years. I am knowledgeable, skilled, and experienced in IP related matters; contract drafting and revisions; trial preparation (including ITC Section 337 trials); and many other legal areas. Further, I earned a bachelor of science degree in electrical engineering and worked as a junior and primary patent examiner for over a decade. Furthermore, I have produced a feature film and set up and maintained the production office before, during, and after filming.
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Kimm M.
Kimm Massey, Esq. is a graduate of Harvard Law School, who has almost thirty years of experience practicing law. Her background includes litigation work for large multinational corporate law firms, the federal government, and the District of Columbia government. She founded Massey Law Group a decade ago. Attorney Kimm Massey has been admitted to the Bars of Washington DC, Maryland, Pennsylvania, Florida, the U.S. District Court for the District of Columbia, the U.S. District Court for the District of Maryland, the United States Court of Federal Claims, the United States Court of Appeals for Veterans’ Claims, and the United States Court of Appeals for the Fourth Circuit.
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F45 Lease
Location: Illinois
Turnaround: A week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 65
Number of Bids: 3
Bid Range: $250 - $1,975
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