Don’t Surrender Before You Move In

It may be somewhat of a cliché, but you need to consider the end before the beginning. Before you sign on to a new commercial lease, you should establish a viable exit strategy.

Office space undergoes significant wear and tear, especially for long-term leases. Tenants need not commit to giving back their office space in the same condition they entered it. Avoid clauses requiring return in “good” condition, without considering any natural depreciation over the years.

A new contingency is now prevalent: a request to remove all cabling and IT infrastructure prior to vacating the premises. If previous tenants left cabling behind, you could end up paying to clean up their mess.

Finally, commercial tenants should be aware of clauses requiring them to pay a significant holdover penalty, up to 200 percent of their last month’s rent, should they remain beyond the expiration date of their lease. Tenants should try to negotiate that down to 150 percent applicable for a month of two before it increases to a higher number.

While many tenants think of their new headquarters as a permanent home, things change. The economy rises and falls. New technological developments can make even the most secure business obsolete.

A wise tenant understands that nothing lasts forever and plans an exit strategy before an entrance.