Signing a commercial lease is a major commitment, whether you’re expanding your business or establishing a new location. With the commercial real estate (CRE) market in flux due to factors like interest rate fluctuations and shifting demand across sectors, it’s more important than ever to approach lease agreements carefully. In 2025, navigating the leasing process can be a bit more complex, so before you sign on the dotted line, ask yourself—and your landlord—the right questions to ensure you’re making the best decision for your business.
Here are 10 crucial questions to ask before signing a commercial lease in 2025:
1. What is the Lease Term and Renewal Option?
Understanding the duration of your lease and the options for renewal is essential for planning your business’s long-term stability. If your lease term is too short, you might face frequent disruptions. A longer term can offer stability but might limit flexibility, especially in a fluctuating market. Make sure you’re clear on the renewal terms, including any potential rent increases or lease adjustments.
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2. What is the Base Rent, and Are There Any Additional Costs?
Base rent is the starting point, but the full cost of a lease often includes additional fees, such as operating expenses, property taxes, insurance, maintenance, and utilities. In some leases, landlords pass these costs on to tenants (also known as “pass-throughs”). Understanding what is and isn’t covered in the rent is crucial for budgeting your business’s operational expenses.
3. What is the Rent Escalation Clause?
Many leases include a rent escalation clause that stipulates how rent will increase during the lease term. This could be tied to inflation, a fixed percentage increase, or market rate adjustments. Make sure you understand how and when rent will go up, so you can plan your finances accordingly.
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4. What is the Zoning for the Property?
Zoning laws can significantly impact your business, especially if you’re in a specific industry that requires certain permits or operational space. Before signing a lease, verify that the property is zoned for your intended use, and inquire about any restrictions or future zoning changes that may affect your business.
5. What Are the Terms of Tenant Improvements?
Tenant improvements (TIs) refer to any alterations or renovations you might need to make to the space to suit your business needs. Some landlords offer TI allowances, while others may not. Be sure to clarify who is responsible for the costs of improvements and whether you need landlord approval for any changes.
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6. What Happens if I Need to Exit the Lease Early?
Life changes, and business needs can evolve rapidly. Be sure to understand the penalties, conditions, and process for terminating the lease early. A lease break clause or subletting options can provide much-needed flexibility, especially in a time of economic uncertainty.
7. What Are the Parking and Transportation Options?
Parking can be a critical factor, particularly for retail or service-oriented businesses that expect customer traffic. Ensure there are adequate parking spaces for your employees and customers. Additionally, consider public transportation options, especially if you’re in a more urban setting.
8. Are There Any Exclusivity Clauses?
Exclusivity clauses prevent the landlord from leasing space to direct competitors within the same property or shopping center. If this is important for your business—particularly in retail—make sure the lease protects your exclusivity rights.
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9. What Is the Landlord’s Maintenance Responsibility?
Clarify who is responsible for maintaining the building, including HVAC systems, elevators, common areas, and structural repairs. It’s essential to ensure that the landlord is responsible for major repairs while you handle routine upkeep inside your leased space.
10. How Will the Property Be Affected by Market Trends?
Market dynamics are always evolving, especially in a post-pandemic world where office spaces, retail properties, and industrial spaces may see varying demand. Ask your landlord or broker about the market trends specific to the location. You may want to assess whether the property’s value could change due to external factors like rising interest rates or changes in local zoning or development.
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Conclusion
Leasing commercial space is a big decision, and in 2025, market conditions, interest rate fluctuations, and changes in business demand can all have a major impact on your success. By asking the right questions and thoroughly understanding the terms of your lease, you can make an informed decision that supports your business’s growth and stability. At The Bill Gladstone Group, we’re here to help you navigate the complexities of commercial leasing and find the right space for your business.
Contact us today to explore available properties and ensure your next lease is the right fit for your goals!