Signing a commercial lease is one of the most significant financial commitments a business owner makes. Unlike residential leases, commercial leases in Florida are largely unregulated — meaning the terms are almost entirely negotiable, and the landlord’s standard form will always favor the landlord. Here is what our advisors review in every lease before our clients sign.
The Base Rent vs. Total Occupancy Cost Distinction
The headline rent per square foot is only the beginning. Depending on the lease structure, your total occupancy cost may include:
- Common Area Maintenance (CAM): Your pro-rata share of the costs to maintain shared spaces — parking lots, lobbies, landscaping. CAM can add $8–$15 PSF annually to your base rent in Broward County.
- Real Estate Taxes: Multi-tenant buildings typically pass through property taxes on a pro-rata basis.
- Insurance: Landlords pass through their building insurance premiums to tenants.
- Utilities: Depending on the lease structure, you may be responsible for some or all utilities.
HVAC Responsibility: A Critical Clause
In South Florida, HVAC systems run nearly year-round and are expensive to maintain and replace. Leases vary significantly on who is responsible for HVAC maintenance and replacement. Some require tenants to maintain and replace the HVAC unit at their expense — a cost that can reach $8,000–$15,000 for a unit serving a 2,500 SF space. We always negotiate for landlord HVAC responsibility or a cap on tenant liability.
Tenant Improvement Allowance (TIA)
Most commercial spaces require some buildout before they’re ready for occupancy. The TIA is the landlord’s contribution toward this buildout. In the current Broward market, TIAs of $25–$60 PSF are achievable for creditworthy tenants signing leases of 3+ years. The amount is typically amortized into the rent — meaning a larger TIA often comes with a slightly higher rent per square foot.
Co-Tenancy and Exclusivity Provisions
Retail tenants in particular should pay close attention to co-tenancy clauses (which protect you if anchor tenants leave) and exclusivity clauses (which prevent the landlord from leasing to a competing business in the same center). These provisions are worth negotiating even if it takes multiple rounds — they can make a significant difference in your business performance.
Personal Guarantees
Landlords will typically require a personal guarantee from business owners, particularly for smaller or newer businesses. We routinely negotiate to limit the guarantee period (typically to 1–2 years rather than the full lease term), cap the guarantee amount, and include “good guy” clauses that limit liability if you vacate and surrender the space in good condition.
Working With a Tenant Representative
Our tenant representation services are typically provided at no cost to the tenant — our fee is paid by the landlord as a co-brokerage commission. There is no financial reason not to have experienced representation on your side of the negotiating table. Contact us before you sign anything.