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How to Choose the Right Commercial Real Estate Lease in California

  • Writer: gloryanng8
    gloryanng8
  • Jul 10
  • 2 min read

To choose the right commercial real estate lease in California, evaluate your business needs, understand lease types, analyze costs and terms, inspect zoning laws, and work with a qualified broker to negotiate favorable conditions.

Commercial Real Estate

✅ Step-by-Step Guide to Choosing the Right Lease

Choosing a commercial real estate lease can impact your profitability, growth, and legal obligations. Follow this guide to make a confident, informed decision:


1. Define Your Business Needs

  • Estimate required square footage

  • Determine layout: open space, offices, storage

  • Consider parking, accessibility, and signage

  • Forecast growth: will your space support expansion?

2. Understand the Types of Commercial Leases

  • Gross Lease: Landlord pays taxes, insurance, maintenance. Tenant pays fixed rent.

  • Net Lease (NNN): Tenant pays base rent + property taxes, insurance & maintenance.

  • Modified Gross Lease: A hybrid—some expenses shared.

  • Percentage Lease: Tenant pays base rent + a % of revenue (retail spaces)

Know what you're committing to—each lease affects your financial exposure.

3. Set a Budget and Review Total Costs

  • Rent per square foot

  • Utilities, maintenance, CAM fees

  • Annual escalations and renewal terms

  • Hidden costs (HVAC, janitorial, insurance)

4. Review Zoning and Compliance

  • Ensure property zoning matches your intended use

  • ADA compliance, local permits, fire safety codes

  • HOA or building restrictions (if applicable)

5. Examine Lease Term & Exit Clauses

  • Short-term vs. long-term: what fits your goals?

  • Renewal options and rate locks

  • Early termination or subletting terms

  • Responsibilities for repairs or damages

6. Negotiate Terms with a Broker

A commercial real estate broker can:

  • Identify landlord-friendly clauses

  • Recommend favorable lease terms

  • Use market data to negotiate pricing

  • Ensure legal protection through proper documentation

7. Get Legal Review Before Signing

Always consult a real estate attorney to:

  • Review lease language and legal implications

  • Protect against unfavorable clauses

  • Ensure lease aligns with state/local laws


Commercial Real Estate

A well-chosen commercial real estate lease is the foundation of your business operations. Whether you're launching a startup or expanding locations, take the time to plan, review, and negotiate the lease that best serves your success.

 
 
 

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