Site Selection surveyed all 50 states to find the one with the best business climate. Texas won the top spot, followed by states such as North Carolina, Tennessee, and Virginia.
This makes it a perfect place for any commercial property investor to start their journey. Even in such a thriving environment, they'll fail without a solid contract with tenants.
Read on to learn everything you need to know about commercial lease agreements in San Antonio.
Types of Commercial Lease Agreements
There's no standard format for commercial lease agreements, and they can take many forms.
A gross lease is straightforward and similar to a residential lease. The tenant pays a fixed rent rate, and the landlord takes on operating expenses.
A net lease requires the lessor to pay a specified amount of rent that can vary from month to month. They're also responsible for expenses such as:
- Utilities
- Insurance
- Maintenance
A modified gross lease combines a gross and a net lease. The landlord and tenant decide who's responsible for which expenses. It's typically allocated via a known as pro rata share.
A percentage lease has both parties work together to keep the business profitable. Rent is a base amount plus a percentage of the business's profit.
A full-service lease requires the landlord to cover all property expenses in exchange for rent.
Commercial Property Lease Components
Commercial leases are, first and foremost, real estate contracts. They outline the expectations for both sides.
Any contract needs one thing more than anything else. That thing is a fully outlined set of terms and conditions.
Important components include clear rules about:
- Lease terms
- Notice terms for not renewing the lease
- Rent amount and due date
- Maintenance responsibilities
- What goods or services can be provided
- What upgrades can be performed
- Subletting regulations
As business rental agreements, they also need to outline who pays for what. Determine who'll cover:
- Taxes
- Utilities
- Insurance
Lease Negotiation Tips
One of the best lease negotiation tips is to know where you may run into disputes ahead of time so you can prepare for them. Commonly disputed areas include:
- Lease terms
- Utility and expense payments
- Rent payments
- Maintenance responsibilities
Clarify all the goals ahead of time. Maintain communication and answer any questions about them. It prevents disputes arising from miscommunications.
A flexible commercial property lease is an attractive one. Be willing to consider changes to the terms to keep valuable tenants.
How Property Management Helps
A commercial property manager can help you draft your commercial lease agreements.
They'll do the market research necessary to set an attractive rental rate. They'll include all the necessary components in the lease and handle any disputes that arise over it.
Where to Get Commercial Property Management
Commercial lease agreements are contracts between commercial property owners and their lessees. They have a clearly outlined set of terms. Property management helps you create and manage them.
PMI Profit Realty is a full-service property management company in San Antonio. We see your property as an investment and are dedicated to protecting it.
Our state-of-the-art technology lets you see how it's doing at all times. We'll show you how to set the maximum possible rent to grow its profitability over time. Contact us today to see how we can make commercial property management manageable.
