Therefore, if you are financially contributing to the space, you need to make sure there is an equitable way to deal with those improvements once the lease has expired.

Having said that, this logic does not make it non-negotiable. Rather, it is due to the fact that if you have a vested financial interest in the space, you are less likely to either (a) default or (b) leave the shopping center for one of the various competitors of the landlord. Well, it’s not because the landlord is greedy and wants to hoard all of your belongings. But take a step back and think why this would be a standard clause of a retail lease. This is certainly an area of the lease you will want to negotiate if you spent the time and money on ceiling lights, certain affixed furniture, and the like.ĭoes this seem a bit unfair? In short, it somewhat is.

Similarly, many standard leases contain clauses that require any and all permanent fixtures to remain on the premises after the lease has expired. On the other hand, if you as a tenant are contributing to renovating the space, you will want a longer lease term so you can amortize the money spent. While landlords generally want to sign a tenant for a long lease term, as they do not like spending capital finding new tenants, it is sometimes in their best interest to work with such a tenant to create a manageable lease. For example, if this is your first venture, and it is not a franchise or other well-known store, it is typically best to negotiate a shorter lease term.

To make a determination as to how long your lease term will be, you will want to consider several economic and personal factors. With extension options and escalations, commercial lease terms typically run anywhere from five to twenty years.

Tips on renting space in a shop