Commercial Lease Agreement

Lease retail, office, or industrial space with a comprehensive, landlord-protecting commercial contract.

What Is a Commercial Lease Agreement?

A Commercial Lease Agreement is a legally binding contract between a landlord and a business tenant for the rental of property used specifically for business purposes (e.g., retail storefronts, office buildings, warehouses). Unlike residential leases, commercial leases offer very few consumer protections and typically involve complex terms dictating who pays for property taxes, insurance, and maintenance.

Types of Commercial Leases

Commercial leases are generally categorized by how building expenses (taxes, insurance, and maintenance) are divided between the landlord and tenant:

Gross Lease (Full Service)

The tenant pays a fixed base rent. The landlord pays for all operating expenses, including taxes, insurance, and maintenance. Often used for multi-tenant office buildings.

Net Lease (Single, Double, or Triple)

The tenant pays base rent plus their pro-rata share of property taxes, insurance, and Common Area Maintenance (CAM). A Triple Net (NNN) lease requires the tenant to pay for all three, minimizing landlord costs.

Percentage Lease

Common in retail (like shopping malls). The tenant pays a base rent plus a percentage of their gross sales over a certain threshold (the "break-point").

Crucial Clauses to Include

Permitted Use Clause (Exactly what business operations are allowed)

Tenant Improvement (TI) Allowance (Who pays for build-outs or renovations)

Signage Rights (Rules for exterior building signs)

Assignment and Subletting Rules (Whether the tenant can lease the space to someone else)

Renewal Options (Tenant's right to extend the lease at a pre-determined rate)

Draft a Commercial Lease

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