Listing Your Leasing Terms in an Offer or Counter Offer
Most landlords prefer two-year or longer leases, but never hesitate to ask for a one-year lease. One-year leases may cost a little more, or have fewer lease renewal options, but you are locked in for less time. Unless you are a multi-million dollar company, it rarely makes good business sense to sign a lease that commits you to the space for more than two years.
Keep in mind if your business outgrows the space, you do not want to be stuck with a long lease. Or worse, if your business struggles and you need to down-grade to a smaller space, you may have a hard time breaking your lease.
For example, you could ask the landlord for an occupancy date and rent start date of January 1, 2009, but ask that the first month be rent-free. In this case, the lease would begin on January 1, 2009 and the landlord could write off the free month’s rent. The tenant would occupy the space for 12 months and the lease would run for 12 months.
Another way of getting the same thing (a free month of rent) is to ask for an occupancy date of January 1, 2009, with a rent state date of February 1, 2009. This means the lease would actually begin one month from the date you move in, or on February 1, 2009.
This type of negotiation only works in a space that is already unoccupied and the landlord is eager to have someone move in because it favors the tenant. In essence, you not only get one free month rent, you get to 13 months of occupancy out of a 12-month lease.