When a landlord hands you a commercial lease, that document was drafted by their attorney to protect their interests. Which is completely reasonable. What's not reasonable is signing it without understanding what you're agreeing to — because a commercial lease can lock you into obligations that follow you for years, sometimes decades.

The biggest misconception I hear from tenants is that commercial leases are standard. They're not. Unlike residential leases, which are heavily regulated and somewhat uniform, commercial leases are almost entirely negotiable. The landlord's first draft is a starting position, not a final offer.

Here's what I tell every tenant client to pay close attention to. First, understand your rent escalations. Many commercial leases include annual increases tied to CPI or a fixed percentage — sometimes 3%, sometimes higher. Over a ten-year lease, those compounding increases add up to a dramatically different number than your starting rent. Make sure you've modeled out what you'll be paying in year eight before you sign.

Second, read the CAM provisions carefully. CAM — Common Area Maintenance — is how landlords pass through the costs of maintaining shared spaces like parking lots, lobbies, and landscaping. The problem is that CAM charges can be unpredictable and, without a cap, can increase significantly year over year. Push for a cap on CAM increases, and ask for the right to audit the landlord's CAM calculations. This is standard in well-negotiated leases and landlords who refuse it are usually hiding inflated numbers.

Third, pay attention to the permitted use clause. This defines what business activities you're allowed to conduct in the space. If it's too narrow, you may not be able to adapt your business model without being in breach of your lease. If you're in retail or food and beverage, also look at whether you can negotiate an exclusive use clause that prevents the landlord from renting to a direct competitor in the same shopping center.

A commercial lease is a long-term commitment. Get it right before you sign. BLG regularly negotiates commercial leases for tenants — reach out before you're under the gun on a deadline.