Leasing Commercial Property: 5 Lease Term Considerations You Should Know About

When negotiating your lease, don’t forget the lease term. Not only should you confirm the length that both parties agree to, but also whether you’ll have an option to renew your lease at the end of this period. This should be agreed upon before you sign a lease.

In general, the more valuable the lease, the more common it is to obtain a longer term one with renewal options. This would commonly range from 5 years to 20 years.

Commercial property leasing term

Things to consider when obtaining a longer lease term

What are the things to consider when obtaining a longer lease term for your commercial property leasing?

1. What’s your plan for the future?

If you’re considering signing a longer lease term, contemplate what your business may look like in 5 or 10 years. If you’re planning on expanding, a smaller premises mightn’t be suitable within a relatively short time, but if you have signed a long lease, getting out of a tenancy might prove to be a costly exercise.

2. Should you purchase the property, instead?

If you are planning on staying in a similar location with similar operations size in the longer term, you may feel more secure signing on for a longer period. In this instance and if you have the means, you might even consider purchasing a commercial property rather than leasing.

3. Who foots the maintenance bills?

Remember that while you as a tenant will bear the cost general repairs and maintenance, the landlord is the person who should be responsible for structural or capital works, unless it’s your fault for them being required in the first place! Don’t forget that even improvements you’ve made to a premises may need to be reversed when you vacate, so check the contract for any ‘make good’ clauses to see what your obligations in this area may be. If this is the case, it’s best to have a condition report completed before you start making changes so it’s clearly documented what will need to occur.

Eco building and vertical forest

4. Is the property sustainable?

Other general costs such as utilities can add up when you’re operating out of a commercial premises. Furthermore, artificial cooling and heating is not the best friend to the environment and many people find it harsh on their systems when temperatures vary widely compared to what is happening outside (being too cool in summer or vice versa). Therefore, looking for a property that is more sustainably designed is a wise choice.

If you can more naturally achieve thermal comfort, people are more productive and even thought to be healthier. Natural light combined with shading works well, north facing windows are ideal.

5. Should you opt for co-working or on-demand spaces?

Today’s flexible workplaces need different types of offices for lease. Whether it be start- ups, freelancers or the nomadic workforce, those that have adhoc or occasional need for office space are increasingly demanding casually leased options. As a result, there’s a rise in the commercial property sector for co-working and on demand spaces.

Whether it be a user pays fee for once off use or membership type subscription, the notion of hot-desking and meeting rooms for hire is being redefined for the 21st century. For the smaller business owner, it means you can rent a smaller space and outsource larger events as needed, saving you serious money over time.


When considering your leasing term, please bear in mind that your decision greatly impacts your bottom line, as well as your business operations and productivity. Make sure that you’re very careful when choosing your options.