The Top 5 Things to Consider When Leasing a Commercial Space

Jan 11, 2024

IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities.  Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family-owned businesses. The following blog article has been provided by Tyler Barnes. Mr. Barnes is a commercial real estate broker with West Coast Commercial Realty (

The Top 5 Things to Consider When Leasing A Commercial Space

If you are looking for a new commercial space for your company’s growth/ expansion, you may be overwhelmed by the amount of options and factors to consider. No matter if it is retail, office or industrial, leasing a commercial space is one of the largest decisions that can have a major impact on your business’s success and profitability. It is important to be educated and well-prepared before you sign any lease agreement.

As a commercial leasing broker, I have helped many clients find the perfect space for their needs and goals, and in this article, I will share with you, in my opinion the top five things to consider when leasing a commercial space, based on my professional expertise and knowledge about the industry.

1. The Location

Your location is one of the most important considerations when finding a new space for your business. You will want to choose a location that is accessible for your customers, employees and even suppliers. You also want to consider the competition, market demand, visibility (both from the street as well as signage), and the perceived reputation of the area.

A few questions to ask yourself when looking for a location are:

-Will it be accessible to your target market and customer base?

-Is it easy to reach your business by public transportation, car, bike, or foot?

-How safe is the neighborhood?

-Are there nearby services that you and your staff can benefit from?

-Would the neighboring tenants have synergy with your business?

-How does the location fit with your brands identity?

2. Size

Size is another important factor to consider when leasing a space. You will want to choose a space that is not too big or too small for your current and future needs. There needs to be a perfect balance as a space that is too big will cost you more in rent, utilities, maintenance, and taxes, while a space that is too small will limit your productivity, efficiency, and growth.

Important factors to consider when determining the size of a space you will need:

-How many employees do you have currently and will need in the future?

-How much equipment, inventory, storage or retail space do you need?

-How much room will you need for meetings, reception areas, break rooms, restrooms, etc.?

-How much flexibility do you need to adjust your layout or configuration in the future?

3. Cost

The cost is probably the most essential factor to consider when you think of expanding. You will need to choose a space that fits with-in your budget and cash flow without cutting corners on practicability. You will also want to know all of the hidden costs and fees that may come with leasing a commercial space such as security deposits, NNN’s, insurance, taxes, utilities, maintenance, repairs, etc. Different types of leases will have different fee structures.

When calculating the cost of a space I suggest asking yourself the following:

-How much can you afford to pay in rent based on current/expected business income?

-What are the potential terms/conditions of the lease agreement such as duration, renewal options, rent increases, etc.?

-What are potential additional costs or fees that you may be responsible for that could be included in your rent?

-How much TIA (Tenant Improvement Allowance) is being offered/will you need?

-If needed, how are you paying for the buildout?

4. Offered Amenities

The offered amenities are another important factor to consider when looking to lease a commercial space. Especially an office space. You will want to take a look at the offered features and facilities that could make your new space standout. It will be important to compare and contrast the amenities being offered to see how they match your needs and preferences.

Some questions to ask yourself when comparing amenities are:

-What are the “must-haves” that you need for your business, such as internet access, security systems, parking spaces, bicycle storage?

-What are some desired amenities that you would like to have included in your lease? Maybe you want a gym, ventilation, heating/cooling systems, elevators, 24/7 security, and so on.

-Ask yourself, do you see your business benefiting from the offered amenities? Things like a gym, cafeteria, conference rooms, etc., you are paying for these. If you do not think you are going to benefit from them, then why pay for them?

-How will the additional amenities affect the cost and value of your space?

5. The Lease Terms

I highly recommend looking closely at the lease terms. You will want to negotiate a lease agreement that will be straightforward, fair, and flexible for both parties (negotiating is always a take some, give some). You will also need to understand all the clauses and provisions of the lease agreement and how they affect your rights and obligations as a tenant. I always recommend having a qualified real estate attorney review a lease before signing.

Questions to consider when reviewing the lease terms are:

-What will the duration of the lease be and what are the options for renewal or termination?

-What will the cost of total rent be, and how will it be calculated/adjusted over time? There are usually going to be yearly increases.

-What are the security deposits and guarantees that will be required by the landlord?

-Who will be in charge of the maintenance and repairs of the building/space?

-What are the subleasing and assignment rights of both parties if there are any?

My Conclusion:

Leasing a commercial space is one of the largest decisions that you will make for your business. This will require careful planning and research. By taking deep consideration of the amenities, size, cost, location, and terms you can find the best space for your business needs and goals.

If you have questions relating to the content of this article or leasing commercial space, Tyler Barnes would welcome the opportunity to talk with you.  Mr. Barnes can be reached at (425) 406-0808 or

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.