Space size
- How many people do you have today
- How much room do you need for storage or equipment
- Do you expect to grow
Tenant Guide
The Ultimate Guide to Leasing Commercial Space
A practical guide to finding, evaluating, and negotiating the right space for your business.
Leasing commercial space can feel overwhelming. There are unfamiliar terms, long contracts, and decisions that can affect your business for years. Most people go through this process only a few times, so it is hard to know what actually matters.
This guide is meant to simplify things. Whether you are opening your first location or relocating an existing business, it will walk you through how the process works, what to look for, how pricing really works, and what to watch out for before you sign anything.
Process
How the leasing process works
Most leases follow a predictable path.
- Search for available space
- Tour properties
- Submit a Letter of Intent
- Negotiate terms
- Sign the lease
- Build out the space if needed
- Move in
The biggest mistakes usually happen early, before you even get to the lease. Getting clear on your needs, budget, and location priorities upfront can save time and money later.
Planning
How to determine what you actually need
Before you start looking at listings, get clear on a few basics.
Layout
- Open space or private offices
- Customer facing or back of house
- Warehouse, showroom, or mixed use
Flexibility
- Will your team expand
- Do you need a shorter term or more flexibility
- Could your space needs change over the next year or two
Most businesses underestimate how quickly their needs change. It is worth thinking a step ahead.
Location
Location matters more than most people think
The right space in the wrong location rarely works. Location is not just about the address. It is about how the space fits into your daily workflow.
For employees
- How easy is the commute
- Is there access to public transportation
- Is parking available and reliable
- Will the location help or hurt recruiting and retention
If it is difficult to get to, it can affect hiring, retention, and day to day satisfaction.
For customers
- Is the space easy to find
- Is it visible or tucked away
- Does the surrounding area support your business
- Is parking or access simple enough for repeat visits
Retail and service businesses depend heavily on this. Office and industrial users still need to think about access, convenience, and perception.
For operations
- Are you close to suppliers or distribution routes
- Is loading or delivery easy
- Does the location support how your business actually runs
- Are there constraints that could slow down daily operations
Pricing
Understanding how pricing really works
This is where most confusion comes in. Commercial leases are rarely just rent.
Base rent
This is the starting price per square foot.
Additional costs
Depending on the lease, you may also pay for:
- property taxes
- insurance
- maintenance
- utilities
- janitorial
- repairs
- management fees
What matters is your total occupancy cost, not just the advertised rent.
Lease Structures
Types of commercial leases
You will typically see a few common structures.
Gross lease
One all in number.
Modified gross lease
Some costs are included and some are shared.
Net lease
Many costs are passed through to the tenant.
Each structure shifts cost and risk in different ways. Make sure you understand what is included, what is estimated, and what can change over time.
Buildings
How to evaluate a building
When you are looking at space, go beyond whether it looks good.
Does it work for your business
- Does the layout support how you operate
- Is there wasted space or awkward flow
- Does the space support your employees, customers, or operations
What are the real costs
- Utilities
- Maintenance
- Improvements
- Ongoing expenses
- Move in costs
What is the landlord like
- Responsive
- Experienced
- Reasonable
- Clear about expectations
You are not just choosing a space. You are entering into a multi year relationship.
Tours
Touring space
When you walk a property, pay attention to what is not obvious.
- Look at layout and constraints, not just finishes
- Check access, parking, and visibility
- Ask what is included and what is not
- Ask what improvements are possible
- Ask who pays for repairs or upgrades
- Take photos and notes
- Compare each property against the same criteria
After a few tours, everything starts to blend together. Take notes so you can compare clearly later.
Guidance
The value of working with the right broker
This is one of the most important and most overlooked parts of the process. A good broker does more than show space.
They should help you understand the market
- be active in your specific market and neighborhood
- know what deals have actually been done recently
- understand real pricing, not just asking rates
- help you compare options realistically
- guide negotiations based on current market conditions
They should help you assemble the right team
- a lawyer to review the lease
- a space planner or architect
- furniture and fixture vendors
- IT and infrastructure support
Access to recent lease comps is especially important. It gives you a real sense of what tenants are actually paying, not just what landlords are asking.
Having the right team in place early makes the process smoother and helps avoid costly mistakes later.
The difference between an average broker and a strong one often shows up directly in your lease terms, your costs, and how smoothly everything comes together.
Negotiation
Negotiating the deal
Commercial leases are negotiable.
Tenant improvements
Who pays to build out the space.
Free rent
Can you reduce costs during the move in period.
Lease term
Longer terms can provide stability. Shorter terms can provide flexibility.
Rent increases
Understand how rent changes over time and what is built into the lease.
Renewal options
Know whether you have the right to renew and how future rent will be determined.
Assignment and sublease rights
Understand what flexibility you have if your business changes.
This is where experience and good guidance really matter.
Review
Understanding the lease
A commercial lease defines:
- rent and payment terms
- maintenance responsibilities
- what you are allowed to use the space for
- how long you are committed
- renewal options
- insurance requirements
- default rules
- who pays for repairs
- what happens if you need to leave early
Unlike residential leases, many commercial lease terms are negotiable. It is worth taking the time to understand what you are agreeing to before signing.
This guide is for general education only. You should have a qualified attorney review any lease before signing.
Mistakes
Common mistakes to avoid
FAQ
Frequently asked questions
How long are commercial leases?
Commercial leases often run three to ten years, depending on the market, property type, landlord, and tenant needs.
Can I negotiate rent?
Yes. Most commercial leases are negotiable, although market conditions and landlord flexibility vary.
What is a net lease?
A net lease is a structure where the tenant pays base rent plus some or all property expenses, such as taxes, insurance, and maintenance.
Do I need a broker?
It is strongly recommended, especially if the broker is active in your specific market and has access to recent lease comps.
What is a Letter of Intent?
A Letter of Intent outlines the major business terms of a proposed lease before the full lease is drafted.
Who pays for tenant improvements?
It depends on the deal. Sometimes the landlord contributes a tenant improvement allowance. Sometimes the tenant pays directly. Often it is negotiated.
Should I have a lawyer review the lease?
Yes. A commercial lease is a serious contract, and a qualified attorney can help identify risks before you sign.
How do I compare two spaces with different rent structures?
Compare total occupancy cost, not just base rent. Include taxes, insurance, maintenance, utilities, buildout, parking, and any other recurring costs.
Get Help
Need help finding the right commercial space?
Tell us what you are looking for and Rofo can help you compare options, understand the market, and connect with the right local resources.
Space type
Office, retail, industrial, flex, or coworking
Market
Your target city or nearby options
Size
A rough range is enough to start
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