One of the best hubs for entrepreneurs in the US is undoubtedly Atlanta. Atlanta has seen a GDP growth of at least 3.5 percent since 2019 and is one of the most popular cities for startups.
What does this mean for real estate investors? This means that if you own commercial real estate, such as an office space, you can expect a flood of potential tenants to knock on your door.
But before you hand over the keys, you need to know how commercial lease agreements in Atlanta work.
Here's what you need to know:
Landlords Have More Control
While laws vary per jurisdiction, landlords for commercial property often have more negotiating power. You can work with a great real estate lawyer to prepare a commercial real estate agreement that works in your favor.
As a general rule, commercial lessees don't have any legal protections protected by the city or state. Their rights are defined by what's permitted in the commercial lease agreements.
Of course, there are limits imposed by the state for all landlords. These limits are meant to ensure safety measures and prevent illegal activities on the property.
Types of Commercial Lease Agreements
Now let's look at the different types of commercial lease agreements. You'll have to decide which option to offer for your property:
- Net lease: In addition to the rent, the tenant pays a portion or the full amount of taxes, property insurance, and maintenance costs
- Double net lease: Tenant will pay the full cost of taxes and insurance in addition to rent
- Triple net lease: Tenant will pay the full cost of taxes, insurance and maintenance fees in addition to rent
- Percentage lease: Tenant only pays rent, which is based on a percentage of their profits or revenue
- Fully-serviced lease: The rent cost includes the cost of utilities and other services or amenities
You can speak to your real estate lawyer to determine which is the best option for maximizing profits.
Terms in Commercial Lease Agreements
Let's wrap up with a few important terms you'll need to know when preparing your commercial lease agreements.
First is the lease term. You have to state how long the agreement will last and the conditions for renewal.
You also have to state the cost of the rent and whether it'll increase at any point. You can also charge a security deposit to confirm the lease agreement.
You can also offer exclusive use or permitted use. The former allows the tenant to conduct business while the property is shared. This is used for malls and shopping centers. Permitted use means that the tenant can only conduct certain business activities specified by the landlord.
Your lease agreements should specify the legal protections for you and your tenants. This contract will be crucial for dispute resolution.
Lease Your Commercial Space
Now you know how commercial lease agreements work for your Atlanta real estate.
As a general rule, landlords will have more control over the agreement. You'll be able to prepare an agreement that works in your favor in most cases.
Make sure you understand the different types of commercial lease agreements. You'll also need to specify the lease terms, rental costs, and what type of use to offer.
The next step is to hire a property manager to help you along the way. PMI Perimeter has over 20 years of experience and is looking to assist you!
