Alicia Sisk Morris CPA | Types of Commercial Properties

Types of Commercial Properties

12 Nov Types of Commercial Properties

A Commercial Lease Agreement will cover almost all commercial property types, including:

• Office space – This space encompasses accounting firms, legal offices, and other types of professional trades.
• Retail and Restaurant -This space covers fast-food restaurants, specialty eateries, clothing stores, chain stores, and brick-and-mortar versions of online retail businesses.
• Industrial – Industrial work space is rented by many trade businesses who specialize in manufacturing products that are either sent out to retail stores and shops or to other larger manufacturing companies and trade businesses.
• Other – Other commercial space can be comprised of most other non-residential properties. Examples are self-storage facilities, medical clinics, and hotels.

Types of Lease Terms for Commercial Properties

• Fixed End Date Lease: This type of lease specifies the exact end date of the tenancy.
• Fixed Number of Weeks/Months/Years: This type of lease specifies a time period for the lease in terms of weeks, months, or years.
• Periodic Lease: A periodic tenancy can be made up of weeks, months, or years and will continue until either party terminates the lease. The most common type is the month to month tenancy.
• Automatic Renewal Lease: A lease based on an automatic renewal means that the lease continues on the agreed upon terms until either the landlord or the tenant gives notice to terminate the contract.

10 Tips to Negotiating a Commercial Real Estate Lease – Small Business Development Center

1) Do your homework – know the average cost per square foot for your area
2) Determine your needs
3) Get professional help from your lawyer
4) Ask what the total cost covers (maintenance, property taxes, insurance, trash, repairs, utilities etc.)
5) Know what is permitted based on lease agreement, zoning regulations or laws
6) Discuss improvements – what can be done and who pays for what
7) Ask if subleases are permitted
8) Consider your timing- the loner the lease the more negotiating power you have
9) Put the lease in writing
10) Ask for what you want in the lease

Sample Commercial Lease Provided by the North Carolina Association of Realtors

What if you default on a lease?

According to the Small Business Association (SBA) “Should you default on your lease payments, there are steps you can take during the lease negotiation process to protect yourself. Find out what the lease agreement states. Will you be locked out immediately? Will the landlord initiate eviction proceedings? Can you negotiate more time? Could you pay only the current month’s rent instead of the remaining amount owed on the lease?”


  • Sarah Gillis
    Posted at 19:42h, 13 November Reply

    Great job, Alicia. The topic of Commercial Properties has quite a bit of information that goes a long with it. I think you did a nice job of offering enough information without overwhelming the reader.

      Posted at 14:06h, 14 November Reply

      Thanks so much for the comment.

  • Adam Renkiewicz
    Posted at 15:41h, 03 December Reply

    This is a great read on the different types of properties and you did a great job of describing not only what to look for, but the advantages and disadvantages of each.

      Posted at 21:17h, 03 December Reply

      Thank you,

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