are 3-year terms becoming more prevalent for local commercial tenants vs. 5-year terms?

An industrial park client is telling me that 3 year leases are becoming more prevalent for local businesses whereas national businesses generally sign for at least 5 year blocks
In General Area - Asked by Tina H. - Jul 15, 2014
Report Abuse
Answer this Question

Answer(s)

Jen S.
Broker/Agent
Cotuit, MA

Typically it is all up for negotiation, however, smaller mom and pop business, or start up businesses tend to request a 3 year lease term to build a name for them selves but still be conservative in case the business folds. I saw them often in retail plazas.

Jul 15, 2014
Report Abuse
Joe J.
Broker/Agent
Scottsdale, AZ

Three year seems to be popular with growing and startup organizations concerned about expansion down the road. Most want to avoid being tied down to a space that doesn't have adequate on site expansion options.

Jul 16, 2014
Report Abuse
Glen W.
Lender/Mortgage Broker
Atlanta, GA

On the properties we manage/own, the lease terms for us are dependent on the amount of tenant improvement needed. For example if we are going to spend a large amount to build out a space would want a longer term to ensure we recoup our investment. If they take the space as is or with minimal TI we are much more flexible and open to shorter term leases

Aug 29, 2014
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question