Hire an Attorney Who Knows Commercial Real Estate Leases

Your business attorney may know your company well. Make sure the attorney reviewing your office lease knows commercial leasing just as well.

Would you hire a residential real estate broker to find commercial office space?

Probably not.

The same specialization matters when reviewing and negotiating an office lease.

Your regular business attorney may understand your company, contracts and broader legal needs. When the company is preparing to sign a commercial lease, make sure the attorney handling the transaction has meaningful experience with commercial real estate leases and landlord-tenant matters.

The lease will govern far more than the rent.

It can determine who pays for improvements, who controls portions of the construction process, when the tenant can enter the space, what approvals are required, what happens when work is delayed and what the tenant may have to restore when the lease ends.

Those provisions can directly affect the capital project that follows.

Look Beyond the Business Terms

The term sheet or letter of intent may establish the basic economics of the deal. The lease and work letter establish much of what happens next.

Before signing, understand provisions involving:

• Tenant improvements and landlord work
• Tenant improvement allowances and reimbursement requirements
• Access to the space before commencement
• Design and construction approvals
• Building rules affecting the work
• Insurance and indemnification requirements
• Alterations during the lease term
• Repair and maintenance responsibilities
• Assignment and subletting
• Restoration obligations
• Renewal, expansion and termination rights

Some of these provisions may appear routine during lease negotiations. They become much more important once the project team begins trying to design, build and occupy the space.

Bring the Project Perspective Into the Lease

The attorney should have the right technical and project information available when reviewing provisions that affect the build-out.

If the project requires unusual power, supplemental cooling, structural modifications, rooftop equipment, after-hours construction, extensive technology infrastructure or other building modifications, those requirements may need to be addressed in the lease documents.

The same applies to schedule.

If the business has a firm occupancy requirement, the team should understand when the tenant receives access, what work the landlord must complete first, what approvals are required and what happens if those activities take longer than expected.

The project team can identify the operational and construction issues. The attorney can make sure the lease documents address the legal and contractual implications.

Ask the Question Early

Before lease negotiations advance too far, ask:

“Does the attorney handling this transaction regularly negotiate commercial office leases?”

If the answer is yes, good.

If commercial leasing is outside the attorney’s normal practice, consider bringing in counsel with that experience for the transaction.

That conversation is much easier to have before the lease is signed.

Leadership Takeaway: The office lease establishes many of the rules under which the capital project will be delivered. Make sure the attorney reviewing those rules understands commercial real estate leasing and has the project information needed to evaluate them.