How Does Signing a Longer Lease Help in CRE Investment

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Presentation Description

When you are about to sign a commercial lease agreement, then you must make sure to decide whether to go for a long or short term. You should always prefer a longer lease as it is always beneficial for the tenant as well as the property owner. A longer lease provides you more flexibility, stability, and no need of frequent relocation of your business. See the mentioned slideshow to know how signing a longer lease will help in CRE investment.

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Presentation Transcript

Slide1:

How Does Signing a Longer Lease Help in CRE Investment

Slide2:

When you are ready to lease commercial space, then it is also needed to be aware of every detail about the lease agreements.

Slide3:

The commercial leases are different from the residential leases and to have a successful negotiation, you must do your research before approaching the owner of the commercial real estate.

Slide4:

Usually, a commercial lease term tends to be longer than the residential lease period, averaging at about 3-4 years.

Slide5:

Why should you sign a longer commercial lease?

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Leasing commercial real estate is an important decision that can dramatically affect the success of your business.

Slide7:

There are many factors that tenants must carefully consider prior to signing the lease agreement and one of those considerations is whether to sign a long or short term lease.

Slide8:

Longer-term leases are binding and you cannot easily break or change a commercial lease agreement.

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Flexibility

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The commercial leases are subject to a lot of negotiation between the tenant and the property owner.

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Most often there is a need for special features in the commercial spaces for a particular business and the landlords are always willing to extend special offers for their longer-term tenants.

Slide12:

A long-term strategy that consists of properly structured long-term leases can be beneficial.

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Stability

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When you sign a longer lease, then there is more stability for the individual business or company and also for the commercial real estate property owner.

Slide15:

For long-term rentals investors, the goal of positive cash flow can be easily achieved.

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And in case, you are a month to month tenant in a busy commercial real estate market, then you are at risk as the property owners always look for long-term tenants.

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No relocation

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It is always an advantage to have a longer lease in place as it helps you avoid the time, revenue and inconvenience of frequent changing of your business place.

Slide19:

It is an important point to remember that the bigger your company or business gets, it becomes more expensive and time-consuming to relocate.

Slide20:

It’s easy for a startup to move around the first couple of years, but when the employee strength keeps on increasing, then it becomes very difficult to relocate to a new commercial real estate property.

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Conclusion

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Understanding of the term of the lease dictates when the business can take the space so that it can start advertising its new location to customers.

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The commercial property owners often prefer to have longer lease terms because this provides greater financial security if they know someone will be occupying the building.

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