Last week we shared some important thoughts on what you should be looking for in your real estate advisor. Just recently I came across an article that highlights the dangers that can exist within lease agreements.
How to Avoid Saying, “Oops, I Should Have Covered that in the Lease!” highlights many of the mistakes that are often made. While the article deals with multiple types of real estate, business executives would do well to heed the advice shared.
The major point is the importance of “getting good help.” Leases are complex vehicles. While much of a lease document may be standard, every lease is – or at least – should be different. It is important that you and your advisor understand your business objectives before lease negotiations.
For example, if you’re a government contractor what provisions have been put into your lease to deal with the sudden loss of a contract? What about a sudden win? If you’re running a data center, what provisions have been put into your lease to protect your enterprise and ensure that you are up and running in the event of a catastrophe?
Additionally, have you given full consideration to the length of the term of your lease to ensure that you either have the flexibility you need or that you can take advantage of poor marketing conditions and lock-in a lower lifetime cost of occupancy?
While the real estate world is complex, it is imperative that you are able to turn that complexity to your advantage. Ensuring you have an advisor on your team that understands all of the intricacies of leases and negations is a great first step.