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How to negotiate a retail lease agreement in California

On Behalf of | Oct 27, 2022 | Commercial Real Estate, Landlord / Tenant |

Landlords in California are typically at an advantage when it comes to negotiating retail lease agreements. They have been in the business for years, so they have experience making a deal more favorable for them. However, you can still make a good retail lease agreement if you understand how to negotiate with landlords.

Have a reasonable budget

You probably have an idea of how much you can afford to spend on your retail space, but it’s important to do your research and have a firm number in mind before you start negotiating with landlords. It’s a good idea to know the market value of the space you’re looking at. This way, you won’t be caught off guard by their asking price and will be less likely to make impulse decisions that could end up costing you more money in the long run.

Know what you want from the lease agreement

It’s important to know what kind of lease agreement you’re looking for before negotiating with landlords. This means being clear about the length of the lease, the amount of square footage you need and any special features or amenities that are important to your business.

Be prepared to compromise

In most real estate transactions, there’s always some give and take for the parties to come to an agreement that they are content with. For example, you could consider signing a longer lease in exchange for a lower monthly rent payment. Or, pay a higher rent if the landlord is willing to add some amenities to the space.

Get everything in writing

This is probably the most important tip when negotiating a retail lease agreement—or any kind of real estate contract. Once you and the landlord have agreed on all the terms of the deal, make sure you put everything into a written contract. Read it carefully before signing it.

Don’t be afraid to walk away

If the landlord isn’t budging on their terms or they’re not meeting your needs, don’t be afraid to walk away from the negotiation. There are other landlords out there who may be more flexible and willing to work with you. It’s better to hold out for a good deal than to settle for something that’s not ideal for your business.

Negotiating a retail lease agreement in California doesn’t have to be difficult if you come prepared. Remember to add clauses that can protect you from things beyond your control, like force majeure or co-tenancy.