Commercial Office Space Lease Negotiation

Purpose of this Guide: Open this plan when your client is a business tenant negotiating a new commercial office lease in the United States. Use this plan when the client has identified suitable office premises and needs legal advice from the Letter of Intent stage through to taking possession of the fitted-out space.

Jurisdiction: United States - commercial real estate. This plan applies to commercial office leases generally across US jurisdictions. Specific state law requirements (such as landlord disclosure obligations and broker commission regulations) may vary by state and should be checked locally. There are no forks in this plan.

The Process at a Glance: The process begins with a thorough review of the commercial deal points in a draft Letter of Intent, including base rent structure (gross, modified gross, or NNN), rent escalation clauses (fixed annual increases or CPI-indexed), Tenant Improvement allowances (TI), free rent periods, and security deposit terms. The LOI is reviewed and negotiated before signature because the landlord will use the LOI deal terms as a baseline when drafting the lease - concessions given at LOI stage are rarely regained in lease negotiations. Once the LOI terms are agreed and executed, the landlord's draft lease is analyzed and redlined, targeting key tenant-protective provisions: SNDA agreements (Subordination, Non-Disturbance, and Attornment) to protect the tenant if the landlord defaults on their mortgage; make-good and restoration obligations at lease expiry; personal guarantee scope and carve-outs; CAM cap protection; subletting and assignment rights; and termination rights. TI allowances and build milestone timelines are negotiated with the landlord, including any rent abatement during the fit-out period and the permitted TI draw-down schedule. Before execution, the tenant's insurer issues Commercial General Liability certificates naming the landlord as additional insured. The lease is executed and the security deposit is funded. On the possession date, a detailed condition report with photographs is prepared to document the premises condition at handover. Post-possession, ADA compliance and occupancy certifications are verified.