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Terms worth examining closely

Base rent matters, but a workable lease balances total occupancy cost, operational needs, risk, and room for the business to change.

Tenant improvement allowance

A landlord contribution toward approved improvements. Define the amount, eligible work, payment timing, approval process, ownership of improvements, and what happens if costs exceed the allowance.

Escalation clauses

Rent may increase by fixed steps, a percentage, an index, or market review. Model the full term and understand floors, caps, review dates, and how additional rent may also change.

Renewal options

An option can preserve continuity, but deadlines and conditions are often strict. Review notice windows, the rent-setting method, required tenant standing, and whether the option can be assigned if you sell the business.

Personal guarantees

A guarantee may expose an owner's personal assets if the tenant defaults. Negotiate scope, duration, caps, burn-off provisions, and release conditions — with legal advice.

Exit and transfer rights

Assignment, subletting, relocation, redevelopment, demolition, early termination, and change-of-control clauses affect flexibility. Understand consent standards and continuing liability before you need them.

Important: These guides are general educational information, not legal or professional advice. Commercial lease terms and laws vary — consult qualified professionals before entering into a lease. Ready to look at real space? Browse current listings.