Tenant Guide
Commercial Lease Negotiation: A Tenant Checklist
Commercial lease negotiation decides what your space really costs for years, and most of that cost hides outside the base rent. This checklist covers what we negotiate for tenants across Denver and the Front Range, whether you are signing a new lease or renewing the one you have.
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Start Commercial Lease Negotiation Early
Time is your biggest advantage. Starting 9 to 12 months before your lease expires, or before you need to move, gives you room to compare options and makes the landlord compete for you. Waiting until the last few months hands the leverage to the landlord.
Commercial Lease Negotiation Checklist
These are the terms we review in every commercial lease negotiation:
- Base rent and escalations: the starting rent and how much it increases each year.
- Lease structure: full service gross, modified gross or triple net, and exactly which costs you pay.
- Operating expense controls: caps on controllable expenses, audit rights and exclusions for capital items.
- Tenant improvement allowance: how much the landlord funds for your build-out and who manages construction.
- Free rent: abated months up front, especially during build-out.
- Term length: long enough to justify concessions, short enough to keep flexibility.
- Renewal and expansion options: your right to stay or grow, and how renewal rent is set.
- Assignment and sublease rights: your ability to exit if the business changes.
- Repairs and maintenance: who pays for roof, structure, HVAC and parking lot work.
- Personal guarantee and security deposit: how much personal and cash exposure you take on.
- Use and exclusives: what you are allowed to do in the space and protection from competing tenants.
How to Negotiate a Commercial Lease Renewal
Renewals are where tenants leave the most money on the table, because moving feels hard and landlords know it. A strong commercial lease renewal negotiation starts with a real market survey and a credible alternative. Even if you plan to stay, touring a few options and getting competing proposals changes the conversation. Ask for refreshed improvements, free rent and updated terms, not just a rent number.
Common Commercial Lease Negotiation Mistakes
- Comparing asking rents instead of total occupancy cost over the term.
- Signing a letter of intent without the key business terms in it.
- Accepting operating expense language without caps or audit rights.
- Agreeing to a personal guarantee with no limit or burn-off.
- Skipping renewal and sublease rights because the business seems stable today.
Why Use a Tenant Rep for Commercial Lease Negotiation
The listing broker represents the landlord. In a commercial lease negotiation, a tenant representative works only for you: surveying the market, running the numbers on each proposal and negotiating the business terms before your attorney reviews the lease. Learn more about our tenant representation, or compare leasing against buying with our lease vs. buy analysis. The U.S. Small Business Administration also has general guidance for small businesses choosing a location.
Common Questions
How do you negotiate a commercial lease?
Define what you need, survey the market, get competing proposals from several landlords, and negotiate the business terms in the letter of intent before the lease is drafted. Then have an attorney review the lease language. Commercial lease negotiation works best when the landlord knows you have real alternatives.
How do you negotiate a commercial lease renewal?
Start early, survey the market, and get at least one competing proposal. Use that alternative to negotiate rent, improvements, free rent and updated terms with your current landlord.
What belongs on a commercial lease negotiation checklist?
Base rent and escalations, lease structure, operating expense caps and audit rights, improvement allowance, free rent, term, renewal and expansion options, sublease rights, repair responsibilities, guarantees and use clauses.
Facing a Lease Decision?
Whether it is a new lease or a renewal, we will run the numbers and negotiate on your side.
This page is general information, not legal advice. Have a real estate attorney review any lease before you sign.