what is a typical term for a real estate leasehold lease?

In Leasing Property - Asked by Joseph M. - Sep 23, 2016
Report Abuse
Answer this Question

Answer(s)

Pam D.
Broker/Agent
Myrtle Beach, SC

I have a property listed that has a 50 year leasehold. It would totally depend on the property owner as to how many years they will offer.

Sep 24, 2016
Report Abuse
Paul B.
Broker/Agent
Grayslake, IL

Please check documents and with city or county the land under neath or even the whole property is on lease for 50 years. It means the title of the current Owner is not free and simple in other words the property is not Freehold.

Sep 24, 2016
Report Abuse
Damon D.
Broker/Agent
Bala Cynwyd, PA

There is no typical lease term. My background is with retail and shopping centers so I will give you my perspective for what I know. A 'mom & pop' retail tenant may only want a 1-3 year lease, more savvy and experienced retailers may want a 5 year initial lease. Depending on the retail category, demand for a particular type of location and amount of tenant allowance involved, many landlords will require a long term initial lease term. For example, fast casual restaurants are a hot category and most require high visibility locations in strong center, typically looking for an end-cap with outdoor seating in an out-parcel building of those centers. There's only so many of those locations, which gives the deal leverage to the Landlord and many require a 10 year initial term. Most will give two 5 year options with this, but some larger landlords with quality locations will not even give options at all unless its for a credit tenant. There are so many variables, it's really an impossible question to provide a generic answer for. It's sort of like asking what the average temperature in the US in the winter...it doesn't really mean anything.

Sep 29, 2016
Report Abuse
CHELSEA J.
Listing Administrator
Chicago, IL

Average starting term can often be 5 years, but that is coming down to 3 years as more vacancies open up. As mentioned in other responses, much longer ones can be required, depending on the area. Typically the business owner wants as short a term as possible (to minimize risk) and the property owner wants as long a term as possible (to have more stability, and less work/cost filling spaces). So both sides negotiate to meet somewhere in the middle, unless it's a hot property, it will probably go for the longest term and highest rate.

Sep 29, 2016
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