Commercial Property Blog

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Flexibility is the way of the future when it comes to Leases

Posted by Dean Claughton on 7 Aug 2015

Are you a prospective commercial tenant and business-owner in an increasingly competitive and rapidly changing industry? You’re not alone - many commercial tenants are veering towards more flexibility within their leases.

Indeed, a recent study conducted by the Tenant Representation Services found that this consideration was reasonably or critically significant to an overwhelming 90% of respondents.

There are already many considerations which fuel negotiations over a lease - rental value, location and what would be a sufficient, yet safe, length of term. The “what ifs” can be exhausting! A flexible lease affords some adaptability to tenant’s individual concerns and can include the insertion of a break-clause to limit liability for rental or the option to downsize the rental space.

Results of the study revealed that close to 60% of tenants would pay a premium cost for each of these options to be included. Similarly 68% of tenants were even happy to forgo incentives in return for a shorter term with greater flexibility to renew.

They’re interesting results and indicate that the future of leases may lay in more flexible, pro-tenant, negotiations. Given the current economic climate, this safety net may give potential Commercial Tenants more of a nudge than ever into taking the plunge and investing.

If you have any questions regarding Commercial Tenancy Leasing or would like help in understanding and negotiating the terms of your lease: Please contact the Coleman Greig Commercial Property team: