Commercial leases can be tricky to navigate if you don’t have an expert on your side. Dertrez Pressley joined me recently to discuss.
I’ve been getting some questions lately about commercial leases, so Dertrez Pressley, our designated commercial agent, joined me to answer them and talk about the process of leasing out commercial spaces.
Typically, we’ve seen clients attempt to represent themselves in a commercial lease. According to Dertrez, this leaves them vulnerable to many different pitfalls. Just like with any industry, a lack of specialized knowledge can hurt.
For example, most people don’t understand the difference between an LOI and a lease. The LOI is a non-binding letter that says the owner is willing to lease under certain conditions, but it’s not a contract. Once you do agree to the LOI, then you sign the lease. These leases are typically written by the building owner’s lawyer, so the lessee needs to have a lawyer on their side, too.
Recently, a client was working on an industrial property from out of state. In our state, you need a personal or corporate guarantee on all leases, and this buyer didn’t know how to negotiate this. They also didn’t understand the TI. They had the landlord contribute x amount of dollars toward their buildout but didn’t understand that it was a reimbursement, not an upfront payment. These are just a few issues that this one client encountered and the consequence was that he ended up losing out on the property he really wanted.
Thanks so much to Dertrez for joining us. If you have any questions for us, don’t hesitate to reach out via phone or email today. We look forward to hearing from you.